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Covid-19-related foodservice closures and the sector’s lagging full recovery still loom over potato growers upstream, increasing uncertainty and keeping a lid on acreage growth, according to a new report from Rabobank’s RaboResearch group.
The surge in input costs and the prices of acreage-competing crops brought by supply chain crises and the war also dampen potato acreage expansion plans. And the persistent, multi-year drought and heat stress in the Western United States still carry the risk of a reduced yield, similar to last year.
We project the annual average fresh market potato price to increase slightly from the previous year to USD 13.70/cwt, whereas the annual average processing potato price is projected to increase by 22% to about USD 11.00/cwt.
Growers’ margins are likely to be tight given rising input costs. The projected increase in the processing potato price implies that contract prices will likely increase by a similar percentage to incentivize growers to commit more acreage.
The cost of delivering potatoes to final buyers and consumers will remain high, but will rise more slowly into 2023.
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