Agriculture Reference
In-Depth Information
Table 6.1.
US fresh market size guide for Russet-type potatoes and
4-
year average prices per size category.
Carton size
(22.68 kg cartons)
Actual number of
tubers per carton
US Number
1
grade tuber
size range
a
per carton (g)
Four-year average
prices (US$/45 kg)
b
<
170
8.60
110-
Count
105-116
170-227
13.54
100-
Count
95-105
199-255
13.54
90-
Count
86-95
227-312
14.71
80-
Count
76-84
255-340
17.02
70-
Count
67-74
284-369
17.62
60-
Count
57-63
312-
397
17.61
50-
Count
48-53
284-
482
17.06
>482
8.60
Notes
:
a
Typical size ranges, US Department of Agriculture allows wider ranges than shown. Assumes tubers <
170
g and
>482 g are sold in bulk to processors;
b
sales FOB shipping point, Columbia Basin, Washington, USA, USDA Federal-State
Market News Service 2007-2010 (
http://www.ams.usda.gov/
)
. Tubers <
170
g and >482 g priced as process market culls
using regional process-cull market values.
6.1
Market and Variety Choice
must be certified as such by a governing body.
Organic certification assures consumers the com-
modity has been grown without the use of syn-
thetic inputs such as synthesized pesticides or
fertilizers and all requirements set forth by the
governing body (Johnson and Sideman, 2006)
have been followed. Ultimately, the decision to
grow potatoes organically is a business decision,
but some producers choose organic over conven-
tional production because they believe it is better
for the environment (Delate and Hartzler, 2003)
and/or healthier for consumption (Davies
et al
., 1995).
Once the market choice is decided, the se-
lection of varieties is typically limited to the de-
mands of the marketplace. As an example, only
a handful of potato varieties meet the stringent
requirements set forth by McDonalds® for pro-
duction of their fries. Moreover, approximately
80% of potato varieties used by Frito-Lay® to
make chips in the USA are owned by Frito-Lay®
(Kirkman, 2007). In addition to having unique
post-frying attributes like mouth-feel, flavor,
aftertaste, crispiness, interior color and texture,
varieties intended for the fry or chip market
must be low in defect level and sugar content,
have easy-to-peel skin and storability, and be
profitable for everyone in the marketing chain—
from grower to franchise owner. In addition to
marketability, seed must be available in sufficient
quantities for planting, and the variety must fit
the growth requirements of the production re-
gion, such as number of days to maturity, dis-
ease resistance, ability to withstand weather
extremes, etc. Unless a new variety is requested
Two major marketing avenues exist for potatoes
intended for human consumption: fresh or pro-
cessing. Fresh market potatoes are those typic-
ally purchased as a fresh, raw commodity by
consumers or restaurants. Processing converts
potatoes into items such as frozen fries (chips in
the UK), chips (crisps in the UK), vodka, schnapps,
starch, flour, dehydrated flakes and pearls,
potato salad, etc. Prior to the growing season,
potato producers must decide if they want to sell
their potatoes to fresh or process market buyers.
They must also decide whether or not to forward
contract their potatoes or to sell them on the
open market. Both marketing strategies have
their advantages and disadvantages, but many
buyers prefer to obtain potatoes through a for-
ward contract. The forward contract removes
significant uncertainty by specifying the quan-
tity, quality, size range, and variety the producer
must supply at a certain time to the buyer at a
previously arranged price. On the other hand,
the open market follows the laws of supply and
demand. Prices paid to the grower are excellent
when demand is high and supplies limited; how-
ever, the open market gamble may result in
financial loss to the grower if supplies are abun-
dant and demand low. Alternatively, the buyer
benefits when prices fall due to excessive supply.
Within the fresh or processing sectors,
growers can choose to market their potatoes as
organically or conventionally grown. In most
developed countries, potatoes marketed as organic
