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Supply and demand in Red River Valley

Characteristic of normal fresh produce industry dynamics, the 2019-20 Red River Valley potato shipping season is working perfectly within basic principles of economics.

“It is simple law of supply and demand,” Ted Kreis, marketing director of the East Grand Forks, MN-based Northern Plains Potato Growers Association said on Jan. 6. “This is how it is supposed to work. When supplies are short, prices naturally go up. That’s what happened this year. If you didn’t adjust the price to supply, you would be done for the season early and therefore create some very unwanted gaps in supply.”Ted-Kreis-PMA-2019Ted Kreis

Kreis said the 2019 red potato production in the Red River Valley was about 30 to 40 percent below the levels of the previous growing season.

Thus, the base price for Size A reds is ranging between $25 and $30 per hundredweight. “Customers have come to consider that the norm now,” Kreis said. “After a while they realize that is the point where it needs to be.”

Red River Valley wash plants shipped at a slower pace the first half of this shipping season. “This has given most sheds adequate supplies to ship well into the spring,” Kreis said.

He expected prices to remain relatively stable into March. At that time there could be price increases as supplies wane.

Yellow potato production in the Red River Valley matched the volume of each of the last two years, Kreis said.