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Epic Produce Sales navigating challenging potato market

By
John Groh, publisher

Normally, a demand-exceeds-supply situation, along with the ensuing strong pricing, would be welcome news to a shipper. But when a market is as tight as the current potato market, no one really benefits.

“The market is high, supplies are extremely tight and everyone is looking for product,” Art Miller, owner of Epic Produce Sales, which is based in Phoenix and sources a large portion of its potatoes from Colorado, told The Produce News on Aug. 11. “We’re still using our storage crop but we’ve had to cut back on orders to make it to the finish line.”

Art Miller of Epic Produce with wife Tatum and daughter Emma.
Art Miller of Epic Produce with wife, Tatum, and
daughter Emma.

Miller said he has been bringing in yellow and white potatoes from California to supplement his supply. But with FOBs in the $20-30 range on A-size yellows, it is a tough sell to his clientele.

“Our potato business is 90 percent export to Mexico,” said Miller. “A $30 market is very high for them, so it’s a problem. We’re probably three weeks behind on the start of our new crop in Colorado, so it will still be some time before we see a decent supply.”

Adding to the market pressure for Epic is the fact that Mexico relaxed its 26-kilometer border zone for shipping potatoes, so product is permitted in to the interior of the country. This has created even additional demand, said Miller.

“We have not even been able to send product to the interior of Mexico because there is so much demand elsewhere,” he said.

Miller said another compounding factor is the USDA Food Box program the government implemented during the pandemic to help growers’ businesses. He said the prices were very favorable for growers, which enticed them to tap into their storage supplies, thus depleting those levels significantly.

“I have been doing this for more than 20 years, and this is one of the worst supply situations I have ever seen,” he said.

Of course, the supply situation is just one part of a challenging year for Epic. Like all shippers across the country, Miller is facing a large increase in the cost of production, with higher rates on virtually all materials and inputs.

“The cost of everything is up – fuel, fertilizer, poly bags, cardboard and pallets,” he said. “We have been trying to buy in bulk to realize some savings, but it is still much higher than in the past.”

He added that labor and transportation present additional challenges for his business. “Labor is very short, so it is difficult to find workers,” he said. “And while freight rates are better now than they were while we were in the throes of Covid, they are still pretty high.”

Miller said it’s not all bad news, however.

“We have been lucky that our customers are somewhat understanding about the higher costs, so they have been willing to work with us on prices,” he said.       “And we are excited about getting into the new crop and having things run a bit more smoothly in the coming weeks. I don’t see any dramatic price decreases any time soon, since demand is still so high, especially with interior Mexico opening up. So they market should stay strong for a while.”

John Groh

John Groh

About John Groh  |  email

John Groh graduated from the University of San Diego in 1989 with a bachelors of arts degree in English. Following a brief stint as a sportswriter covering the New York Giants football team, he joined The Produce News in 1996 as an assistant editor and worked his way up the ranks, becoming publisher in 2006. He and his wife, Mary Anne, live in northern New Jersey in the suburbs of New York City.

 

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