January 2019
Potato Industry: Tariffs, transportation, soil health top list of issues By Zeke Jennings

Tariffs were a major story for the global economy in 2018 and the potato industry did not escape their effects.

China and Mexico — two of the largest importers of U.S. potatoes — levied tariffs on numerous goods, including spuds, in response to the Trump administration’s tariffs from its attempt to get more favorable trade deals for the U.S.

Frozen potato exports were down 6 percent during the first quarter of the 2018-19 season, dehydrated potatoes were down 7 percent and fresh spuds were down 12 percent, according to a Potatoes USA report.

Blair-Richardson-Potatoes
Blair Richardson

“I think the one thing we’re really trying to put energy toward is protecting our international market,” Potatoes USA CEO Blair Richardson said. “We’ve spent a lot of energy and resources on developing it over the past 20 years. We now export one of out every five rows of potatoes grown in the United States. We don’t want to lose those markets.”

Richardson noted that global demand for potatoes continues to rise, especially in Asia, so exportation will continue to be a major topic.

In no state is exporting more important than Washington, which sends more than half its crop to other countries each year. Despite first-quarter numbers being down, Washington State Potato Commission Executive Director Chris Voigt wasn’t overly concerned. He noted the drought in the European Union that resulted in a reduction of nearly 20 percent of potato production. In addition, poor harvest weather in Prince Edward Island and Manitoba contributed to a projected reduction of 4.3 percent for the Canadian crop.

“If you’re going to have tariffs put in place on your product, this is probably the year to do it,” said Voigt, who added he expects Washington growers to find buyers for all of their potatoes and possibly not even be able to meet international demand.

“Globally, potato production is going to be down.”

RELATED: Voigt isn’t too worried about first-quarter export numbers

Public perception

At the height of the Atkins diet craze, “carb” became as infamous as other four-letter words. No food seemed to be as closely associated with carbs than potatoes. Consumption numbers dropped.

“I think a lot of the Atkins, the South Beach — all those things that had a huge impact on the potato industry, but with everything we’ve heard, some of that has died back,” said Don Flannery, executive director of the Maine Potato Board. “Consumers may be more accepting or it isn’t such an issue anymore. But with that loss, you never gain all of that back.”

Nutritional studies and society’s growing quest to eat smarter, particularly among the younger generations, could be making an impact, however.

“I don’t think it’s a swing, I just think we’re becoming smarter,” Richardson said. “Twenty years ago is when Atkins diet was at its peak … everyone thought carbs — any kind of carb — were bad. Come to find out, there are different kinds of carbs, complex carbs to simple carbs.

“A (potato) is a natural food, a whole food. Those types of (complex) carbohydrates are now being perceived as not only good for you, but part of a healthy diet.”

Processed potatoes continue to grab up a larger share of the market. In Maine, approximately 65 percent of the crop goes to processing, while only about 15 to 20 goes to the fresh market, Flannery said. Thirty years ago, those numbers were reversed.

“There were a heck of a lot more people with kids eating at home than they do today,” he said. The numbers back him up.

“For the first time (in 2017), we actually saw more tablestock potatoes sold in foodservice than in retail,” Richardson said. “It’s a furthering of the trend we’re seeing, and over time, I think we’re going to see that continue.”

As a general rule, U.S. consumers are paying closer attention to the who, where, what and why of any purchase, none more so than food.

“One of the things we should do and the potato industry ought to be looking at is building that type of relationship with the customer, letting them know where it comes from because that’s important to a lot of people,” said Flannery, who told of his state’s success with its Caribou Russet variety among residents or Maine transplants who want Maine-grown potatoes.

“They like to see that branding right on the bag,” he said. “We’ve had a huge acceptance for it.”

GMOs

Like carbohydrates 15 or 20 years ago, public opinion of genetically modified organisms (GMO) isn’t particularly favorable, at least not yet. Labeling a product as being “non-GMO” is widely considered favorable in terms of marketing to the general public.

J.R. Simplot’s Innate variety, or White Russet, was approved by the U.S. Department of Agriculture, which stated the GMO Innate was “as safe and nutritious as their conventional counterparts.” It is desirable because it is less likely to brown and produces less asparagine, which can result in a carcinogen when fried, noted University of Missouri Ph.D. student Nat Graham.

Despite being just as nutritious and possibly safer, a very small percentage of potatoes grown in the U.S. are GMO. It’s not the growers that have a hang-up on genetically altered spuds; they’re just waiting for public demand, which internationally, is even behind the U.S.

Chris-Voigt-Washington-State-Potato
Chris Voigt

“Our growers would absolutely love to grow the GMO potatoes, particularly some of the ones in the pipeline that will be introduced shortly,” Voigt said. “There are some really great traits that I would be a benefit in our industry.

“The struggle that the growers have, particularly in Washington state, is that we’re so export-dependent. Unfortunately, most of Asia is not real excited about genetically altered potatoes.”

Flannery isn’t aware of any GMO potatoes being grown in Maine and estimates it could be “awhile” before there is a significant amount. Once again, it’s about demand.

“In general, the philosophy of our growers is that we’ll grow what our customer wants,” Flannery said. “It’s not that we’re opposed to it. Our growers see a lot of potential there.”

Other challenges, opportunities

Despite trucking companies continuing to increase pay and bonuses, there is a huge driver shortage in the U.S. There is a need for more than 50,000 more truck drivers, the American Trucking Association’s Bob Costello told the Washington Post in 2018.

Growers and shippers also have had to deal with adjusting to the Electronic Logging Device (ELD) law, which went into effect in 2017.

“Last year was a real learning curve through that process,” Flannery said. “We worked with the National Potato Council and other states successfully in getting clarification in the ELD and the ag exemption. … It’s a 150-mile exemption from point of departure or loading before that kicks in for perishable products, like potatoes, so it’s a been a huge success getting clarification on that.”

RELATED: ELD Hours of Service (HOS) and ag exemptions

Flannery said that drivers in southern Maine have worked on a shuttle-type system to help solve service hour limitations, but added, “there is also a cost to that. Things always come back to cost and the tight margins we have in the potato industry.”

Labor continues to plague farmers nationwide, although Richardson noted that potato growers aren’t among the worst affected because the industry is more “mechanized” than others. Flannery said that while the number of workers needed may not be as high, the skill set needed still presents some anxiety. “To some degree, you need a little higher caliber labor with some of the equipment and technology out there,” he said.

Voigt feels drones will become more common in potato fields and that making the most out of the farmland already in use will be a major focus. The Washington State Potato Commission is in the process of raising $3 million to create an endowed chair at Washington State University that will focus solely on soil health and potato cropping systems.

“One way to expand production is to get more water to dry land,” Voigt said, “but the other is increasing yields on existing grounds or shortening those rotation cycles. Instead of once every four years, it’s once every three years or maybe even two years.

“Soil health is going to be a really big focus for us, at least for the next 10 years if not longer.”

As Flannery mentioned on the general public wanting to be more informed of where their food comes from, that same thirst for knowledge will also lead to more legislation.

“People are wanting to get involved in our business because they want to know where their food is being grown, how it’s being grown and how it’s being handled,” Richardson said. “It’s going to create further regulation, further work on the farm and in the offices of the farms. I think that’s just something we’re going to have to live with and it’s not going be predictable.”

2018-Fall-Potato-Estimates



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