Mike Schena, President, Better Made Snack Foods

Market Report

Betty Crocker Pouch Potatoes
 

 
USDA Extends Comment Period

Simplot Names CEO

University of Idaho Offers Four New Publications

Washington Grower to Lead NPC

 
 
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Show Season
PICTURE This winter, I had the opportunity to go to four potato meetings in January and February. Growers at the Potato Expo in San Antonio and at the Washington, Oregon and Michigan potato conferences all were optimistic about the future of the industry. William Schaefer, the Spudman Idaho editor, heard similar sentiments from growers at the Idaho Potato Conference.

The winter meetings are a great time to meet people from every segment of the industry, from Extension to equipment manufacturers to state and national association leaders. Growers are the real focus of the meetings, however, and I enjoyed meeting a number of you for the first time.

This year, Spudman gave away hats and bumper stickers, and I’ve already received pictures of them in use. Here’s my favorite, sent in by an employee at United Potato Growers of America. This future potato grower is taking his brother out for a spin after applying the “Proud to be a Spudman” bumper sticker. If you have a "Proud to be a Spudman" photo you'd like to share, please send it to me.
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Industry Expert
Mike Schena,
President of Better Made Snack Foods, Detroit, Mich.
 
How are potato prices affecting chip processors?

Last year everyone was looking at oil. This year it will be potatoes. Never in all my years of doing this have I tried to sell $13 to $14 potatoes. The cost is going to be passed along to consumers, and they won’t buy $4 bags of potato chips.

Right now there’s a slowdown of production. Fortunately, Better Made has expanded into other products. But the market is kind of soft. We have consumers who are looking at the labels, and when you start to approach $4 it becomes a purchase decision, just like in fresh-market potatoes.

Today, consumers have to eat at home, so potatoes will rebound. The pricing, I don’t know what that will do to the market. We’re fortunate in Michigan because, although fuel prices are low now, they probably won’t stay that way. We have the transportation and the people nearby, and Michigan has grown into a great supplier of chipping potatoes.

In the chip market, we’re fortunate to have good supply. Cost is a factor, but it’s a real cost. Right now, the chip open market is slow – it’s been dropping since Christmas. It’s a dead time in the chip industry. People are going to buy potato chips come summer. They just do. It’s a reward factor. It depends on how much money they have, but the average consumer will still pick up a bag of potato chips.

We made the decision not to promote during those months because of the cost of potatoes. I don’t know what other processors are doing.

I’ve never seen anything like this before. We survived $1, and I believe we can survive $13 to $14 potatoes. But it’s the consumers that will push back. The Wal-Marts and other big retailers already are. Meijer isn’t because the company is very supportive of Michigan products and the buy local products.

All I can say is “wait and see,” because it will be a very interesting spring. TEXT

 

Market Report
The number of farms grew in the United States between 2002 and 2007, according to USDA’s Census of Agriculture. The agency counted just more than 2.2 million farms, a 4 percent increase over 2002 and about the same number as the 1997 Census of Agriculture.

Most of those new farms were considered hobby or lifestyle farms, but the concentration of total agricultural value was in fewer hands than in 2002. Residential/lifestyle farms – those with sales less than $250,000 and where the principal owner reports a primary occupation other than farming – accounted for 36 percent of farm operations in the United States. The second largest group of farms was retirement farms, which accounted for 21 percent of operations.

Large family farms – sales between $250,000 and $500,000 – and very large family farms – sales more than $500,000 – accounted for only 9 percent of farms, but produced 63 percent of total agricultural value. Agricultural production has become more concentrated since the last census in 2002, according to USDA. In 2007, 125,000 farms produced 75 percent of the total agricultural value. In 2002, 144,000 farms produced that same amount. Farms with sales more than $1 million annually accounted for 59 percent of the total agricultural value in 2007, a 12-percentage point increase from the 2002 census.

The market value of all farm products sold in 2007 was $297 billion, a 48 percent increase from 2002. Vegetables accounted for about $15 billion of the total, an increase from the 2002 census. The average per-farm income was $134,800, a 43 percent increase. Input costs also rose, but not as much as the market value, which led to an 84 percent increase in net cash across all farms, and an average per-farm net cash income increase of 78 percent to $33,800.

The average farm spent about $110,000 on production expenses in 2007, according to the census. That was a 34 percent increase from the $81,000 spent in 2002. The biggest increases in expenses between 2002 and 2007 were for gasoline and fuel – which jumped 93 percent – and fertilizer – which jumped 86 percent. Every other input saw double-digit increases: seed (55 percent), feed (55 percent) and farm labor (20 percent).

Contract growers make up only about 2 percent of total farms in the United States, according to USDA, but produced 16 percent of total agricultural production in 2007. The value of production from contract growers increased 55 percent between 2002 and 2007 for a total of $49 billion, while the total number of contract farms decreased by 14 percent.

 

Betty Crocker Pouch Potatoes
PICTURE Betty Crocker, a General Mills company, introduced a line of 80-calorie mashed potatoes.

The Betty Crocker Pouch Potatoes are ready in three minutes and made from 100 percent real potatoes, according to the company. The Pouch Potatoes are available in three varieties: Creamy Butter, Roasted Garlic and Cheddar and Sour Cream.

The new line from Betty Crocker adds to the 26 other potato product lines that the company markets.