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Potato farming in the United States

March 28, 2014, United States – The wide acceptance of the industry's products and constant demand from downstream market have caused American potato industry revenue to grow fairly steadily in the past five years, according to a recent IBISWorld Industry report. 

Potatoes are the most widely produced vegetable in the United States and form a well-accepted component of a number of prepared dishes and snack foods including french fries and potato chips. Sweet potatoes have increased in popularity in recent years, though still represent about 10 per cent of the industry's sales. Over the five years to 2014, revenue for the potato farming industry has grown an annualized 1.6 per cent to $4.6 billion.

According to Antal Neville, IBISWorld industry analyst, the industry is in a constant balancing act with downstream markets, trying to keep their output at levels that will give them a desirable sales price. But this is not a surefire strategy. "Consequently, a large harvest in 2012 led to an oversupply, causing prices to drop," the report says. Prices have since readjusted, but wary farmers reduced their planted acres, leading to a drop in production; as a result, revenue is expected to fall 5.5 per cent in 2014.

“Export markets, both of fresh potatoes and downstream processed potato-based foods, have been a boon for industry growth in the past five years,” says Neville. Export sales have grown an annualized 7.1 per cent in the past five years. Growth in emerging economies in particular represents an opportunity for revenue growth, especially as the U.S. government negotiates free trade agreements like the Trans-Pacific Partnership, currently under discussion among 12 Pacific Rim nations. Increasing exports and growth in the popularity of organic and specialty potato varieties within the domestic market are expected to lead the industry to grow.

Read the full IBISWorld report here. 

March 28, 2014  By Potatoes in Canada