The 2011 Wisconsin potato crop looks like it will be even smaller than the 2010 crop, according to Bob Johnson, representative for Rosholt, WI-based Katz Produce Sales LLC. “And that wasn’t a very productive crop,” he said.
“Growers are a couple of weeks behind their normal schedule, so some product is still in the ground,” he continued. “At this point there’s a little gray area as to what it will end up looking like, but we do know it was a slow start.”
Mr. Johnson added that the popular belief among Wisconsin growers is that the warm weather in early summer did not help the potatoes.
“Potatoes grown in darker soils do better in heat than those grown in the sandy soils we have here in central Wisconsin,” he said. “Our climate and soil is normally great for growing potatoes, but not when temperatures stay in the 90s for 10 straight days, which is highly unusual for this region.”
Long-term pricing, he said, will be dictated primarily by Idaho, as it is the biggest shipper of fresh potatoes. Freight differences contribute to differences at the receiver end.
“The Idaho market is pretty soft right now,” he added, “and the indication is that it will remain that way for a while. Prices are currently lower than people expected.”
Katz Produce Sales handles potatoes and onions primarily for Wisconsin shippers, but it also routinely sources from other states. Its primary customers are retailers, and it sells to foodservice operators.
The majority of its product is sold east of the Mississippi River, which Mr. Johnson said is in harmony with the “potatoes always move east or south” theory.
“Demographics dictate this,” he explained. “The heaviest-populated areas are along the East Coast and Great Lakes. The vast amount of stored onions and potatoes comes from Oregon, Washington and Idaho, and they have to move east.”
Katz Produce Sales does a lot of private-label packaging. It is heavy in russet potatoes, but handles all categories.
Mr. Johnson said that he has not heard anyone say that the Idaho crop looks bad, but marketers there seem to have a little extra acreage this year.
“They are pushing the crop hard, so that tells me that they have a lot of potatoes to sell,” he said. “We’ve seen a pretty dramatic drop in f.o.b. pricing, and it takes a while for that to reflect at retail. Several weeks ago, people were not predicting soft pricing, so retailers set up their ads accordingly. Consequently, pricing is not reflecting current prices, which are pretty high compared to today’s costs. It’s fine if you’re a retailer, but from the standpoint of moving a lot of product, it doesn’t work.”
The current pricing situation is on the tail end of what Mr. Johnson says were ridiculously high summer prices, and consumers don’t get excited about only slightly reduced potato prices. He added that it will take a few weeks for current prices to level off at retail and for demand to increase.
He said that overall consumption is pretty flat.
“My feeling about the fresh-potato side is that there are a lot of people in their 20s and 30s who don’t have kids, and they don’t cook much,” he said. “They buy a five-pound bag of potatoes, not a 15-pound bag like their parents did.”
Food safety and traceability, he feels, will continue to get stronger.
“Everyone is doing their part,” he said. “It’s adding costs, but the potato industry is proactive in this movement. You better know what you’re doing and be ready for the changes as they surface. Our company is in this strongly, and it will stay there.”
Katz Produce Sales maintains a pretty-low profile, but that’s how they like it. They’ve handled a consistent group of customers for a long time.
“We take good care of them, and we add new products as they fit into their programs,” said Mr. Johnson. “We want to maximize our effectiveness with the many loyal customers we have.
“We hit the 50-years-in-business mark last year,” he continued. “We hope to be around for another 50. As business changes, we’ll work to change with it. Technology has changed the way we do things. Sometimes I miss the voices of the people I work with. We e-mail back and forth several times a day, and customers are so busy that they often don’t have time for personal responses. On the other hand, if I’m doing the job I should be doing, customers don’t have to waste their time talking to me.”