Prices and shipments up for San Luis Valley's potato industry
Prices and shipments up for San Luis Valley's potato industry
MONTE VISTA, CO -- With a 10 percent reduction in acreage in 2005, potato growers and shippers in Colorado's San Luis Valley were seeing predictable shortages in January as well as the hoped-for result of such a reduction: higher returns on their product.
Planted acres were stated at 58,000, down from 63,000 in 2004, and Linda Weyers, assistant executive director of the Colorado Potato Administrative Committee, said that figures in January indicated shipments that month were ahead of the same time period the previous year.
Total shipments (480 hundredweight equivalents) through December were 13,070, compared to 12,377 in 2004. A five- year look at shipments through December showed 2003 with 12,516 and 2001 with 13,496. A jump in loads was experienced in 2002, when 15,027 had been shipped by year's end.
Breaking down the stats by variety, the end of December saw 82.6 percent of all russet varieties having been shipped and 10.5 percent of all other varieties. Nearly 61 percent of all U.S. No. 1s were in the hands of receivers, and just under 30 percent of U.S. Commercial Grade had been shipped as well. The committee noted that 43.3 percent of bulk had been shipped.
Fresh-market shipments by truck totaled 3,274, and 293 loads had gone to processing. A four-year high in rail shipments amounted to 417.
Prices in late December were consistently higher than in 2004, with U.S. No. 1 reds bringing $12.71 f.o.b. for 50- pound carton or bale. B-size reds brought an even $13. Yukons were $8.96 for 10 five-pound bundles.
All U.S. No. 1 russets were $6.15. Ten-ounce minimum russets were $6.79, and bulk hundredweight russets were $7.75. No. 2 russets were $8 per hundredweight.
At United Fresh Potato Growers of Colorado, Chief Executive Officer Dwight Freeman said he'd seen prices "holding well, and farmers are able to get increases." Bulk was $9 in early January, and Mr. Freeman said that poly and cartons were firm.
"Nationwide reds and yellows are in short supply," Mr. Freeman said. "Both are bringing good prices."
Individual grower-shipper figures varied from shed to shed, but most grower-shippers said that production was down. At Skyline Potato Co. in Center, Randy Bache said that production was down by some 3 percent and shipments were off by 7 percent as of early January.
"We've done that on purpose," Mr. Bache said of the slowdown in shipments, adding that he had "weeded out some of the 'lookie-loos.'"
Mr. Bache said that the San Luis Valley will not likely "see overproduction for several years," and added, "We have the potential for decent years due to taking care of oversupply issues."
Higher prices have resulted in what Mr. Bache termed "sticker shock" for many retailers which "are not wanting to address supply and demand." And "demand is up since the death of [low-carb fad diets] and because of new nutritional information on potatoes."
But while returns are on the upswing, cost of production has also risen steadily over the past several years. Skyline Controller Mike Jones said that 2005 was "only the second profitable year in the last 10," and he and Mr. Bache said that they're seeing a 25 percent increase in the cost of fertilizer and a 35 percent increase in fuel costs for 2006.
Mark Bisel of Apex Produce in Center agreed that prices were up substantially from 2004's crop.
"The potato market is acting pretty nice, triple what it was last year," he said. "And those prices seem to be sticking."
He went on to say that No. 2s were "moving well because of the price difference, cresting a dollar or two under No. 1s."
In short, Mr. Bisel said, "It's an outstanding year, and farmers are making money."
Also in Center, David Tonso of Ca?on Potato Co. said that the overall crop in the San Luis Valley is approximately 5 percent short of average, adding, "We [at Ca?on] are probably 15 percent short of what we need to make it to July."
The warehouse has "plenty of reds and golds, but russets and short," Mr. Tonso said.
At nearby Aspen Produce, Jed Ellithorpe said that short supplies have translated to increased domestic demand. "Prices are remaining strong, and Colorado seems to be in a position where we can have strength in the marketplace," Mr. Ellithorpe said. "Growers have suffered lower markets in the past few years."
John McCormick of McCormick & Milne near Monte Vista concurred. "It's a good year," he said, "and about time."
(For more on the San Luis Valley potato deal, see the Feb. 6 issue of The Produce News.)
Planted acres were stated at 58,000, down from 63,000 in 2004, and Linda Weyers, assistant executive director of the Colorado Potato Administrative Committee, said that figures in January indicated shipments that month were ahead of the same time period the previous year.
Total shipments (480 hundredweight equivalents) through December were 13,070, compared to 12,377 in 2004. A five- year look at shipments through December showed 2003 with 12,516 and 2001 with 13,496. A jump in loads was experienced in 2002, when 15,027 had been shipped by year's end.
Breaking down the stats by variety, the end of December saw 82.6 percent of all russet varieties having been shipped and 10.5 percent of all other varieties. Nearly 61 percent of all U.S. No. 1s were in the hands of receivers, and just under 30 percent of U.S. Commercial Grade had been shipped as well. The committee noted that 43.3 percent of bulk had been shipped.
Fresh-market shipments by truck totaled 3,274, and 293 loads had gone to processing. A four-year high in rail shipments amounted to 417.
Prices in late December were consistently higher than in 2004, with U.S. No. 1 reds bringing $12.71 f.o.b. for 50- pound carton or bale. B-size reds brought an even $13. Yukons were $8.96 for 10 five-pound bundles.
All U.S. No. 1 russets were $6.15. Ten-ounce minimum russets were $6.79, and bulk hundredweight russets were $7.75. No. 2 russets were $8 per hundredweight.
At United Fresh Potato Growers of Colorado, Chief Executive Officer Dwight Freeman said he'd seen prices "holding well, and farmers are able to get increases." Bulk was $9 in early January, and Mr. Freeman said that poly and cartons were firm.
"Nationwide reds and yellows are in short supply," Mr. Freeman said. "Both are bringing good prices."
Individual grower-shipper figures varied from shed to shed, but most grower-shippers said that production was down. At Skyline Potato Co. in Center, Randy Bache said that production was down by some 3 percent and shipments were off by 7 percent as of early January.
"We've done that on purpose," Mr. Bache said of the slowdown in shipments, adding that he had "weeded out some of the 'lookie-loos.'"
Mr. Bache said that the San Luis Valley will not likely "see overproduction for several years," and added, "We have the potential for decent years due to taking care of oversupply issues."
Higher prices have resulted in what Mr. Bache termed "sticker shock" for many retailers which "are not wanting to address supply and demand." And "demand is up since the death of [low-carb fad diets] and because of new nutritional information on potatoes."
But while returns are on the upswing, cost of production has also risen steadily over the past several years. Skyline Controller Mike Jones said that 2005 was "only the second profitable year in the last 10," and he and Mr. Bache said that they're seeing a 25 percent increase in the cost of fertilizer and a 35 percent increase in fuel costs for 2006.
Mark Bisel of Apex Produce in Center agreed that prices were up substantially from 2004's crop.
"The potato market is acting pretty nice, triple what it was last year," he said. "And those prices seem to be sticking."
He went on to say that No. 2s were "moving well because of the price difference, cresting a dollar or two under No. 1s."
In short, Mr. Bisel said, "It's an outstanding year, and farmers are making money."
Also in Center, David Tonso of Ca?on Potato Co. said that the overall crop in the San Luis Valley is approximately 5 percent short of average, adding, "We [at Ca?on] are probably 15 percent short of what we need to make it to July."
The warehouse has "plenty of reds and golds, but russets and short," Mr. Tonso said.
At nearby Aspen Produce, Jed Ellithorpe said that short supplies have translated to increased domestic demand. "Prices are remaining strong, and Colorado seems to be in a position where we can have strength in the marketplace," Mr. Ellithorpe said. "Growers have suffered lower markets in the past few years."
John McCormick of McCormick & Milne near Monte Vista concurred. "It's a good year," he said, "and about time."
(For more on the San Luis Valley potato deal, see the Feb. 6 issue of The Produce News.)
