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California potato deal starts with good market

by Tim Linden | May 13, 2011

Potato growers and shippers in Kern County, CA, were very optimistic the second week of May as they began digging, selling and shipping the new crop of potatoes for the 2011 season.

“It is a very strong market, and it looks like it could remain strong all season,” said Don Johnston, chief executive officer of Johnston Farms in Edison, CA. “Demand is very good.”

Mr. Johnson said that digging for new red and yellow potatoes began the week of May 9, but the first russets

Potato growers in Kern County, CA, are seeing a strong start to the 2011 season and could experience a strong market throughout the deal. (Photo courtesy of Kundert Bros. Farms Inc.)
from Kern County will not surface until about June 1. “That’s a little later than usual — maybe five days. We’ve had erratic weather all spring.”


The longtime Kern County potato veteran said that the inclement weather would affect yields, as the potatoes will probably be a bit on the small side this year. “But the quality is excellent,” he said. “And we will still make size A, but we will get less yield [per acre].”

Tom Franconi, president of Mazzei-Franconi Co. LLC in Edison, CA, gave a very similar account of the season. “We have had an irregular spring, so that always makes it very hard to know what’s going to happen,” he said May 10. “But we did start digging this week and the quality looks good. We will have to see how the potatoes size as the season goes on.”

Mr. Franconi said that the acreage is up about 10 percent this year, with most of the increase coming in the russet variety. In total, the fresh crop of reds, whites, russets and yellows has been pegged at 8,236 acres compared to about 7,400 acres in 2010.

Last year’s russet crop came in at fewer than 2,000 acres, so this year’s acreage of more than 2,700 acres is up about 30 percent.

Russets are the leading fresh variety this year followed by red potatoes (2,296 acres), whites (1,784) and the yellow variety (1,433). While the more than 8,000 acres represents an increase over last year, it is very much in line with what the area has produced over the last several years.

Decades ago, Kern County’s potato production, including both fresh and processed, was well above 50,000 acres per year, but those days are history. Over the decades, permanent crops, such as citrus, nuts and tree fruit crops, have been planted in big numbers, transforming the landscape of this agricultural community in the southern end of California’s rich and fertile San Joaquin Valley.

But the potato category is still important to the district and to the country as it represents the beginning of the new potato season each year.

In addition, there has been much growth in the specialty potato arena. About 15 years ago, longtime grower-shipper Kundert Bros. Farms Inc. in Edison, CA, experimented with some fingerling potatoes for the first time, and he has now switched all its acreage to various specialty varieties.

Mike Kundert, president of the operation that was started by his grandfather 65 years ago, said that he was a relatively small grower-shipper and it was difficult to compete in the mainstream potato categories.

Although it is more expensive to grow the specialty varieties because of decreased yields and increased input costs, Mr. Kundert said that the market is generally higher and his firm has done fairly well for the past decade.

“We’re still in business,” he quipped.

Mr. Franconi estimated that taken in total, the specialty potato varieties account for about 2,500 acres in the Kern County district.

If that number is accurate, it would mean that specialty potatoes trail only russets in total acreage.

Although the grower-shippers with whom The Produce News spoke were very optimistic about the marketing of the 2011 crop, they were a bit apprehensive about freight rates.

Mr. Franconi said that shippers try to utilize whatever transportation options are available, including trucks, railcars and intermodal service such as Railex, which has a loading dock in Delano, just 30 miles up the road from the main potato-growing region. He said that trucks tend to price themselves out of the deal fairly early while the intermodal service offers a little bit of a price break and railcars are clearly the least expensive option.

“It takes an extra five to seven days by rail, but trucks are just too expensive,” he said.

Crunching the numbers May 10, Mr. Franconi said that freight rates via truck would be about $17-$18 per hundredweight on that day compared to about $11 by railcar. He said that Railex would fall somewhere in between.

“Railex prices follow the truck rates pretty closely, but they try to stay a little under it to give you a little incentive,” he said.

Mr. Johnston said that his firm is planning to ship mostly by railcar this year, “but we heard some news yesterday that isn’t very good. The new rates for this year are up as much $1,000 [to the East Coast] over a year ago. That’s tough to swallow. We are going to have to look at every option. Trucks are going to be really high also. We are going to have to look at the feasibility of Railex and other options.”