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Stable potato pricing expected despite temperature issues throughout harvest season

A map of shipping locations on the Potandon Produce LLC website shows 25 different locations around the United States, plus one in Canada, in addition to seven facilities in the company’s home state of Idaho, from which Potandon ships potatoes.

The company also ships onions from various producing areas, but that’s another story.

With regard to Potandon’s potato packing and co-packing network, “our philosophy is to be able to get potatoes to people any day and every day of the year,” said Steve Elfering, vice president of operations in an interview with The Produce News.

2-Potandon-NWMkt---Steve-ElferingSteve ElferingPotandon packs the potatoes under several house labels as well as private labels, but “the primary focus of Potandon is the Green Giant Fresh label,” Elfering said. “That is the core of our whole marketing program.” That applies to russet varieties, colored varieties and specialty potatoes.

Even value-added retail consumer packs of specialty potatoes such as Microwaveable Klondike Gourmet Potatoes in several flavors of sauce sport the Green Giant Fresh name and art.

The company also packs several house labels and private labels.

“The heart of our potato sourcing,” both for russets and for other varieties, “is Idaho,” Elfering said. “That is what everything else builds off of. And most of what we ship here comes from our own ownership group or our dedicated supply group.”

That is also true for most of the potatoes Potandon sources from other growing areas. On the production side, “we want the core of our business to be tied to the ground” through “arrangements with our growers” to assure the company’s ability to ship, year-round, the large volumes customers are expecting. With the consolidation process that has taken place in both the retail and foodservice sectors, having a dedicate supply of product is necessary to “take care of the large customers …, to match our massive scale with theirs, and to be able to take care of them year-round from an f.o.b. standpoint,” he said.

Outside of Idaho, Washington is Potandon’s largest-volume potato growing area for russets and colored potatoes. “We also have operations … in Arizona which are variety potatoes — reds, yellows, and minis.”

As with Idaho, most of the Washington and Arizona production “comes from our ownership group or dedicated supply group as well,” Elfering said. Some growers in Arizona are also Potandon owners, but there are “longstanding exclusive marketing agreements there as well.”

Potandon has variety potato operations in North Dakota as well, through “a dedicated marketing arrangement,” he said.

In Texas, Potandon has what “I would refer to … as a joint marketing effort,” he said.

Other states in the Potandon f.o.b. network include Colorado and Wisconsin for Russets and Minnesota for reds and yellows, he said.

In addition, “to complement our f.o.b. shipping supply,” Elfering said, “we have an extensive in-market supply as well for shorts, small orders, last minute orders, same-day or next-day delivery.” That consists of “various regional in-market packers in such areas as Boston, Cleveland and Atlanta “to name a few.” All pack for Potandon in the Green Giant Fresh brand.

The in-market network also helps assure timely delivery to customers when severe weather might otherwise create “one- or two-week gaps in the f.o.b. shipping,” Elfering said.

“We try to ship ahead to the in-market packers” so that when certain product lines “are gapping at an f.o.b. shipping point, we can keep shipping them out of the local or in-market packers.”

The potatoes for Potandon’s mini-potato line come primarily from Arizona and Washington “on a year-round basis,” he said.

“One of the keys to our yea-round mini program is we have our warehouse here in Idaho Falls that we bring a large portion of our minis to.” That enables the company to consolidate a pallet or two of those specialty products with shipments of other Potandon products such as Idaho russets destined for customers “all the way to the East Coast through our distribution network.”

Elfering also commented on the 2017 potato harvest nation wide and the market outlook for the coming year.

“There is the potential this year for … a fairly decent market nationwide on russets,” due to the combined effect of reduced acres and weather-related reduced yields in some locations,” he said.

In some producing areas such as Washington, “they shipped heavily” during the harvest due to good markets, “which further shortened the storage crop in those areas,” he said.

In Idaho, the supplies available for fresh shipments may be further diminished by high demand from the frozen potatoes processors, he said. “They may look to the fresh industry for some supplies.”

Overall, he added, “I think the market outlook is good from a price standpoint.”

With regards to quality, Elfering said, “there is some really good quality,” but overall, “would say the quality is good but mixed.”

Gabe Boldt, variety manager for Potandon, sad that with regard to yellow potatoes, there was strong demand toward the end of the 2016-17 marketing season and into the 2017 harvest. As a result, “there was a lot of product that was moved” during the summer months.

However, harvested acreage appears to have been up overall, so he expects above-normal supplies for the storage crop.

On the reds, he said, acreage was down a little, but yields were up a little, so overall the crop size appears to be about average.

As to quality, much like with the russets, “we are going to have a mixed bag” due to “temperature issues throughout the harvest season,” Boldt said.

He expected pricing “to be pretty stable throughout the year.”