“We are in a rough situation, and chances are things will get worse before they get better,” Crystal Carpenter, senior economist with CoBank, told attendees at the San Luis Valley Potato Business Summit on Monday in Monte Vista.
“Those who are holding on need to hold on a little longer.”
This year will likely see a decent business cycle but not as robust as 2018, Carpenter said. “There’s a lot of things on the horizon, risk elements, that could tip us into a recession.”
Carpenter said the potato market is not experiencing the same decline in exports as some other commodities. Potato growers are not as reliant on exports as some other commodities, she said.
In 2018 through October, potato exports relative to other commodities “definitely held a lot better than other commodities, didn’t see the same decline in exports as others did.”
Of course potato growers would like to expand their markets to countries like China, Mexico and Japan, she added, but there are obstacles such as increased tariffs in Mexico.
Bruce Huffaker, North American Potato Market News, also spoke about economic challenges.
“The biggest thing that drives your table potato prices is the volume of shipments each year, and that changes year to year,” he said. “It doesn’t take much of a shift in movement to make a big change in pricing.”
He said shipments are projected to be a bit higher for the remainder of this season than they have been in the past few years.
Shipments of russet potatoes are projected to be somewhat less than the year before. Prices have been lower in the Columbia Basin and Idaho for russets than for Colorado and Wisconsin, Huffaker said.
For red potatoes, shipments are behind what they were a year ago and prices are not as high as last year. The forecast will be quite a bit below last year in terms of shipments, Huffaker said, primarily in the Red River Valley.
He said United Potato Growers is predicting $12.08 per hundredweight for the remainder of the season for the San Luis Valley, but the average so far has been $10.80.