Potato market altered by pandemic, war and drought, Rabobank report says

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.

The latest Rabobank potato report is now available here.