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Consumers, processors drive demand for organic spuds

Organic agriculture is about 2 percent of total U.S. agriculture, and sales of organic produce were about $5.8 billion in 2005. But the market segment is growing, and in 2007 sales from organic produce are predicted to be about $6.5 billion.

Organic potatoes are a small part of the overall U.S. potato harvest, but growers are seeing increased demand that is following the growth in organic produce sales. That demand is from both the fresh market and processing side of the industry.

Fresh Market

“Here in central Illinois, the demand for organic/locally grown potatoes follows the sharply increased demand for all such vegetables in recent years,” said Dave Bishop of Prairierth Farm in Atlanta, Ill. “The demand is for specialty/heirloom table stock, such as green mountain, all red, all blue, etc. – varieties generally not found in most supermarkets.”

Organic potatoes are typically grown on fewer acres than conventional potatoes, and most often are sold directly to consumers.

“We have had a demand for potatoes, probably because of the coming Thanksgiving holiday,” said Gloria Emerson of Red Oak Ranch, Turnersville, N.J. “We have a CSA (Community Supported Agriculture) and most of the demand comes from our customers. This will probably keep up straight through the Christmas holiday. Unfortunately, our stock is just about through for the season.”

“I am a small grower and sell only direct to consumers,” said Zaid Kurdieh of Norwich Meadows Farms in Norwich, N.Y. “Two years ago, I had an agreement to sell Whole Foods organic fingerlings, but we were hit by late blight in a very bad way. Since then, we have reduced acres but we continue to sell more and more potatoes. I have increased my prices immensely and we still sell out.”

Seed can be an issue for organic growers. The guidelines from USDA regarding organic seed are open to clarification, and interpretation of guidelines can vary between certifiers. For example, it is acceptable to grow potatoes in an organic way even if the seed wasn’t produced organically. While USDA didn’t specify the guideline, certifiers determined it based on USDA clarifications and statements. The organic community is closely linked, so when USDA says something, organic growers across the country find out about it almost immediately.

Jim Gerritsen grows 10 to 12 acres of organic seed potatoes at Wood Prairie Farm in Bridgewater, Maine. He’s also on the board of directors for the Organic Seed Alliance. He sells 16 varieties, plus he tests six to eight varieties every year. He sells to market growers, who usually buy between 1,000 pounds and 3,000 pounds, but the bulk of his sales go to backyard and home gardeners. They typically buy between 1 pound and 100 pounds, but despite their smaller purchases, Gerritsen said they’re his best group of customers.

“We’ve tried to identify every niche out there and try to fill it with the best variety,” he said. “We’re particularly keen on growing high-quality organic seed.”

Chipping Potatoes

Consumers are demanding more healthful snacks, and some potato chip manufacturers have turned to organics to fill that need.
Kettle Foods, maker of Kettle Chips, has been producing certified organic potato chips since 1989, and has been making all-natural chips since 1984. This year, the company will ship more than 1.5 million bags of Kettle-brand organic potato chips. That’s the highest volume the chipmaker has seen and it’s a 20 percent increase over last year, outpacing the organic segment that is growing at about 16 percent annually. The company announced in November that it had redesigned its packages to make the USDA-certified organic label more prominent.

“Two decades ago, a lot of people thought we were crazy, but to us going organic made perfect sense,” said Michelle Peterman, vice president of marketing for Kettle Foods. “Why wouldn’t people want hand-cooked, organic potatoes with no artificial stuff? Now organic is all the rage, and we’ve been here all along doing our thing. It’s fun to watch the market catch on to the flavor promise of organic, and now our packaging better reflects it.”

The growth in the organic chip market is about twice that of traditional chips. Sales were up 41 percent for a 12-week period ending in early October, the company said.

Kettle’s organic chipping potatoes are harvested from certified organic fields in Oregon and Washington, the states with the highest organic yields in the country. Idaho, the country’s largest potato producer, is fourth in the country for organic potato production. According to the USDA Economic Research Service in 2003, Idaho grew 357 acres of certified organic potatoes, behind California’s 3,057 acres, Colorado’s 1,370 acres and Washington’s 1,142 acres.

Organic Research

But some in Idaho are trying to change that. Keith Esplin of Potato Growers of Idaho, Jennifer Miller of the Northwest Coalition for Alternatives to Pesticides and two researchers from the University of Idaho are working on a research and marketing program to increase organic acreage in the state and ensure farmers who go organic succeed.

“Here in Idaho, we really lag behind in organic production,” Miller said. “We’re making sure the farmers who try it will be successful.”

If Idaho is going to be represented proportionally in the 2 percent of produce that is organic, then more acreage has to be converted to organic, Esplin said.

“In Idaho, that would mean 6,000 to 7,000 acres,” he said. “We’ve got a lot of catching up to do.”

There has been demand for organic Idaho potatoes from the fresh market and processors. Unfortunately, Esplin said, once processors find out how few organic potatoes Idaho grows, they lose interest. When processors do buy organic Idaho potatoes, they take the all they can get their hands on.

“The process side takes the supply before you can develop the market,” Esplin said.

Joe Guenthner, professor of agricultural economics at the University of Idaho, is conducting market research to see which segments have greater demand for organic potatoes, as well as the varieties and timing. Guenthner’s research should be out in the spring, and will help guide industry groups and growers in the state about organic production. Bryan Hopkins, also at the University of Idaho, planted Idaho’s first organic test plot to study production and conduct field demonstrations. Response has been good among growers, and many interested growers showed up for the field demonstrations.

“There’s definitely interest, but there’s some skepticism,” Esplin said. “Once it’s shown that it can be done, I think more growers will switch over to growing organics.”

Esplin said there are areas in Idaho that show potential for growing organic potatoes. There are farms that are isolated from conventional potato production, and some are already being used for organic ranches. It’s just one scenario that Esplin hopes growers explore to increase organic potato production in the state.

Originally posted Saturday, Apr. 7, 2007

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