SHELLEY, Idaho-Red and yellow potato prices were at historically high levels at the start of August.
As growers throughout the country rushed to dig and capitalize on record prices, however, Shelley, Idaho, grower Reed Searle believes the market for red and yellow spuds became saturated. He watched prices for No. 1, size A, 2,000-pound tote bags of reds drop from about $40 per hundredweight shortly after the start of the month to $14 by Aug. 16.
But Searle, who himself dug his reds earlier than ever before this season, isn't fretting. He, like many red and yellow spud growers in the Northwest, sees evidence of short crops, due to weather problems in major colored potato regions, and believes prices will rebound in a matter of months.
"They've never seen prices like this, so everyone jumps on board," Searle said, adding such a specialized market is prone to big swings. "Now we'll just put stuff away and let the dust settle."
Prices for the 2012-2013 crop started low after harvest and shot up in the spring, hovering at record highs until the recent drop. Searle, who raises 600 acres of reds and 200 acres of yellows for Eagle Eye Produce in Idaho Falls, ships his crop from Aug. 1 through June 1. He switched from growing Russets to colored potatoes in 1998.
"It seemed like more restaurants and food service were going for (reds)," Searle said.
Shane Watt, vice president of sourcing with Wada Farms in eastern Idaho, said poor red crops planted during winter in warm growing areas, damage from heavy rains in key red and yellow seed production areas and expectations of reduced yields in some of the major red and yellow fall commercial growing areas should lead to a favorable supply for the 2013-2014 crop. He predicts this fall's red and yellow crops will again fetch record prices.
"In general, the red market has been at record highs for several months. It is coming off a little bit, but the forecast, if we can get through harvest, supplies will be limited throughout the season," Watt said. "We should be able to market this crop at near record levels on pricing."
Watt said red and yellow harvest started about a week early in Minnesota, Wisconsin, Texas and other major growing areas as growers-especially those without storage-sought to capture peak prices.
Wada Farms has grown its red production 5-6 percent since installing a line in its Pingree, Idaho, processing plant to sort reds and yellows, Watt said. He said acreage has increased steadily in Idaho, though reds and yellows are still niche products, and there's been a trend toward fresh packing sheds adding equipment to sort colored varieties, which must be polished and handled differently than Russets.
In Washington's Skagit Valley, a major red and yellow production area, acreage has held flat for the past few years, said Dale Hayton, sales manager with Valley Pride Sales. He said weather damage during each of the past two seasons has held production in check, and he expects an average crop from his region this season.
"We're a little bit concerned about size and yield," Hayton said. "There's been quite a bit of weather damage in the Midwest. We expect the market to be quite strong for this particular crop.
Southeast Idaho grower Ritchey Toevs has noticed healthy increases in demand in recent years for his red potato seed.
However, Toevs sees limitations to growth in the market. Processors have already contracted for their needs with reds and yellows, there's no dehydrated market for them, and he said it's more risky to grow fresh colored spuds without a contract than Russets, which can be sold to a multitude of buyers.
"I think people are pretty cautious about expanding into varieties that have only one place to go," Toevs said.
Source: capitalpress.com