Europe isn't the only country experiencing a very difficult potato market. In the United States, demand is also low due to strong production. This has resulted in the lowest open potato prices for table potatoes in almost a decade.
The table potato market in Europe is still slightly more favorable than the French fry market. However, at €3 to €6,50 per 100 kilos at PotatoNL, prices are far from profitable. In the United States, the situation for Russet table potatoes isn't much better. The season started at a reasonable level, but prices have since almost halved.
Price drop
The new potato season in Idaho kicked off in mid-August at a price of €37,69 per 100 kilos. That was already lower than in recent seasons, but still not bad. The average export price has since dropped to $10,54 per hundredweight, equivalent to €20 per 100 kilos. While not a bad price in European terms, it's not very profitable for American potato growers. A year ago, the price was €34,85 per 100 kilos.
The reason for this price pressure is the state's strong harvest, the largest potato harvest in the US. This year's yield is estimated at 6,42 million tons, the sixth-largest harvest in 25 years. The last time this much potato was harvested was in 2018. Since then, the yield has not exceeded 6,35 million tons (140 million cwt).
Seasonal influence
Historical data shows that prices are always under significant pressure in the first half of the season. On average, prices drop by 40%. This year, that drop is much higher, at almost 50%. When the price drop ends varies from year to year. It can last until February or early March. Last year, prices even continued to fall throughout the season, ending in late July.
Potato prices are likely to continue falling in the coming months. Idaho is estimated to have harvested 285.760 tons more potatoes this season than in 2024. Furthermore, overall US potato production is good and comparable to last year. The current insider estimate is 19,09 million tons, compared to 19,04 million tons according to the USDA. This is 1% higher than the 25-year average.
Less processing
French fry producers have more than enough potatoes under contract to meet their needs. Although the French fry market in the country is quite strong, they are particularly affected by increasing competition in the global market, particularly in Asia. Insiders expect factories that produce dried potato products (such as flakes and granules) to buy slightly more potatoes from the open market. Current prices make this an attractive option. In 2024, the US processing industry processed 2% fewer potatoes.
Exports of Russet table potatoes also declined by 2% in 2024. However, the volume was still 6% higher than the five-year average. The relatively low prices in Idaho ensure healthy demand for table potatoes from the state in the US. Export levels were 3,4% higher in mid-October than a year earlier. This, however, means that other states are struggling to sell their potatoes, as they cannot compete with the current low prices being paid in Idaho.
Lower profitability
Looking at the profitability of American growers, it's clear that cultivation isn't paying off. This is reflected in the Idaho Growers Return Index (GRI), which measures how much potato growers earn from their potatoes. Currently, the GRI is $1,97 per hundredweight. This equates to €3,74 profit per 100 kilos. A year ago, it was nearly €16 per 100 kilos ($7,19/pound).