US potato acreage in 2022 again historically low

Last week, the US Department of Agriculture (USDA) published figures on its expectations for the areas of agricultural crops in the country in 2022, the so-called 'Prospective Planting Report'. The area of ​​agricultural land remains stable at more than 128 million hectares. Arable farmers are sowing more soybeans (+4,3%) and wheat (+1,4%) this year. This has everything to do with favorable expectations for the price and lower input costs this season. Barley, peas and sunflowers also show a significant increase.

Historically low acreage
The USDA will not release an acreage figure for potatoes until June. In 2021, this amounted to 381.620 hectares. Industry insiders think that the area for this year will amount to just under 379.000 hectares in 2022. This means a decrease of 0,7% or 2.620 hectares. That's not a shocking change, but it makes this year the second smallest ever. Only in 2020 were fewer potatoes grown.

Only the states of Washington and Texas show significant growth in the area, it is estimated. In Texas that doesn't mean much because the lonely star state has the smallest potato area of ​​all potato growing states. Washington is number 2 (after Idaho) with an estimated acreage of 68.000 hectares. A plus of 3% compared to the year before. After an extremely dry season, processors in the state are looking for potatoes and offering favorable contract terms for the 2022-2023 season. In addition, part of the cultivation has moved from Oregon to Washington due to an expansion of processing capacity.

Water shortages
A decline of 1,5% is expected in the potato state of Idaho. That amounts to 2.000 hectares. Drought and a shortage of water for irrigation make cultivation difficult. The water basins that growers can draw from during the season are usually only three-quarters to 80% full due to little snowfall last winter. Insiders believe that farmers are more likely to switch to crops that can better withstand drought, although processors have been aggressive in contracting potatoes.

Despite the fact that there is a lot of demand for fries in North America, the area is expected to decrease here. In addition to water shortages, the enormously increased costs for all inputs are a reason to grow less. Factories have increased their contract prices. It is expected that costs will be at least 15% to 20% higher than in 2021, although that percentage could easily double. Fuel is 64% more expensive, nitrogen and potash have doubled in price and phosphate is 65% more expensive. Crop protection is up to a fifth more expensive and machines and parts also cost a quarter more.

Cost price increases 30 percent
Bottom line, you end up with a cost price increase of no less than 30% in one year. Insiders calculate $12.600 per hectare – equivalent to €11.545. Last year that was $11.010 (€10.087). Contract prices are estimated to have increased by 18% to 20%. Not enough to cover the higher costs. This means that processors have not secured sufficient potatoes under contract for the coming processing season.

Does a small area automatically mean too few potatoes? Certainly not. If we calculate with the multi-year average yield - which is much more stable than in Europe - the total harvest (table, chips and starch) in the country amounts to 19,5 million tons of potatoes. This means the largest volume in 22 years. In practice, averages are worthless. Last year, heat and drought hit the potato crops, causing the yield was very below average.

Opportunity for European processors
The start after a dry and warm winter is far from ideal. It extrapolates water shortages that are not sufficiently replenished after a dry year. For the EU – and especially Belgium and the Netherlands – a potentially tight American harvest offers opportunities. The country has been a growing consumer of fries for years. But then European processors must have access to sufficient potatoes and that is also an uncertain factor at the moment.