Potatoes

History
Potatoes are the leading vegetable crop in the United States (not including sweet potatoes), contributing about 15 percent of farm sales receipts for vegetables. Over 50 percent of potato sales are to processors for french fries, chips, dehydrated potatoes, and other potato products; the remainder goes to the fresh market. Although potatoes are grown year round, the fall crop comprises roughly 90 percent of potato production.

Potatoes are a tuberous crop grown from the perennial plant Solanum tuberosum. Potato tubers are specialized stems of the potato plant that form just under the soil surface. Potato plants sprout from cut portions of whole potatoes (usually certified seed potatoes) commonly referred to as seed pieces or potato seed. The crop grows in various climates and soil types, is storable, and provides consumers with a relatively inexpensive source of calories. Potatoes are the fourth-most-consumed food crop in the world, after rice, wheat, and corn.

History
The potato originates from the Lake Titicaca region of the Andean Mountains, located near modern-day Peru and Bolivia. It was domesticated between 10,000 and 7,000 years ago, providing a stable high-altitude food source for many cultures. The Incan people (13th-16th century A.D.) regarded the potato as key to their food security since the crop could easily be stored in dehydrated, freeze-dried, and fresh form for consumption during times when other crops failed. Between 1532 and 1572, Incans introduced the potato to Spanish explorers.

Reaching Europe around 1570, potatoes were first considered a novelty shared between royal courts, but quickly became popular with sailors as a cheap and nutritious food source that prevented scurvy, a common ailment caused by vitamin C deficiency. In the late 1700s, when much of Europe was engulfed in crop failures and famine, the potato was accepted as a stable, high-calorie food source that could be grown in a variety of climates, producing high yields for feeding both livestock and people. Ireland became particularly dependent on the crop by the mid-1800s. After three consecutive crop failures between 1845-1848 because of late blight infections (a fungal disease), more than 1.5 million people died from starvation or emigrated from Ireland.

Many Irish immigrants fleeing the Irish potato famine immigrated to the United States, bringing the potato with them. However, the potato was already an American crop; documentation of its cultivation dates back to early colonists. The importance of potatoes in U.S. agriculture has been documented since 1866 when USDA first included them in crop production statistics. Today, the United States ranks fourth in the world for potato production, behind China, Russia, and India.
Geographic Production
Historically, Maine, New York, and Pennsylvania were the main potato-producing regions. As settlement expanded west in the late 19th century, the invention of adequate irrigation systems and the development of refrigerated rail transport spurred States like Idaho, Washington, and Colorado to take the lead in U.S. potato production.

Western States produce almost two-thirds of fall potatoes, with Idaho and Washington accounting for over half of the U.S. total. Between 1866 and the early 1920s, production increased with expanding acreage, which reached a peak of 3.9 million planted acres in 1922. Acreage slowly declined thereafter, to around 1.0 million acres today, yet production continued to rise as yields trended upward. By the 1940s, yields had increased because of advancements such as:
• Introduction of improved varieties such as the Russet Burbank potato, which was first bred in the 1920s by Luther Burbank and known for its large uniform size and complementary sugar content needed for french fry production;
• Increased use of chemical inputs such as fertilizers and pesticides;
• Use of irrigation systems;
• Innovations in transportation infrastructures, particularly the introduction of refrigerated rail cars and trucks; and
• Shift in production from Eastern to Western States, which have higher concentrations of nutrient-rich volcanic soils optimal for potato production.
Over the past decade, the potato industry has significantly consolidated growing operations. The Census of Agriculture reported 15,014 farms that produced potatoes in 2007, down from 51,500 farms reported in 1974. Because of large capital investments in equipment and storage facilities, farmers have sought to maximize production through larger operations.

Seasonal Production
Roughly 90 percent of U.S. potatoes are planted in the spring and harvested in the fall. The marketing season for fall potatoes begins in August (for areas of early harvest) and may continue through the following August. Unlike most produce crops, which are perishable, potatoes are well-suited for long-term storage in climate-controlled rooms or containers.
Because of their physical characteristics and storage advantages, many major fall-season potato varieties can be sold in fresh or processing markets throughout September-August marketing year. Potatoes for fresh use are sold mostly on the open market (rather than sold under production contracts negotiated prior to the growing season), so prices are subject to market conditions. Shippers' ability to store potatoes allows them greater flexibility when marketing potatoes on the open market.

Processing potatoes that are used for making french fries are typically contracted to commercial fryers before planting time. The contracts specify the potato variety, volume, and price based on previously negotiated quality requirements. Grower contracts with processors are negotiated and signed before spring plantings, enabling growers to procure and plant exact amounts of processing varieties.
Potatoes harvested in the winter, spring, and summer account for less than 10 percent of U.S. potato production. However, these potatoes meet specific market needs and generally fetch higher prices than fall potatoes. For example, some consumers like "new" or "freshly dug" potatoes, such as round red, white, yellow, and purple varieties that are smaller in size and are normally not stored before sale. Specialty varieties, such as the round white, are also in demand for their chipping qualities. Moreover, winter, spring, and summer potatoes help fill any supply gaps that may arise because of shortages of the preceding fall crop in the fresh market or for processing use.

Sales per acre are normally highest for the winter crop and lowest for fall potatoes, but vary widely among producing States. Prices for fresh potatoes are usually higher than prices for processing potatoes because of crop-quality standards. Domestic potato prices may vary not only in response to changes in weather, yield, or demand, but also changes in supply from imported potatoes and potato products. If a large quantity of frozen french fries enters the country, U.S. potato processors may cut back on contracts for processing potatoes, which would then be diverted to the fresh market. Fresh-market prices would likely fall as a result.
Fresh and Processed Potatoes
Potatoes are usually grouped into two categories:
• fresh
• processing
Within the processing category, there are four general classifications:
• frozen (mostly french fries)
• chips
• dehydrated
• canned
Historically, fresh potatoes were the primary form of potato consumption in the United States. But because of the increased popularity of french fries and other processed potato products since the 1950s, use of fresh potatoes has decreased from a high of 81 pounds per person in 1960 to an average of 42 pounds per person in the 2000s. Prices for fresh potatoes are usually higher than those for contract-based processing potatoes. Because farmers can sell fresh potatoes on the open market, they can store harvests until prices are favorable for sale. Since 2000, the average price for fresh potatoes has ranged from a low of $7.34 per hundredweight (cwt) for the 2003 crop to a high of $14.44 for the 2008 crop.

Since 1970, use of processed potatoes has surpassed fresh use in the United States. Spurred by the innovation of frozen-french-fry processing techniques in the 1950s and the increasing popularity of fast food chains, processed potatoes composed 64 percent of total U.S. potato use during the 2000s (compared to 35 percent in 1960s). During the 2000s, U.S. per capita use of frozen potatoes has averaged 55 pounds per year, compared to 42 pounds for fresh potatoes, 17 pounds for potato chips, and 14 pounds for dehydrated products.
Trade
Since 2005, the U.S. potato industry has enjoyed a trade surplus in potatoes and potato products. Net export value (U.S. exports minus imports) of potatoes and potato products in 2009 totaled $180 million. Japan, Canada, and Mexico are the top three export markets; together, they account for about two-thirds of total U.S. potato exports. Most exports consist of processed potatoes, such as frozen french fries, potato chips, and dehydrated potato products (e.g., potato flakes, granules, and flour).

Frozen french fries are the top U.S. potato product export, accounting for more than half of total potato export volume. In 2009, exports of frozen french fries totaled 3.0 billion pounds (fresh-weight-equivalent basis), valued at $635 million. Although 2009's volume and value were down from 2008, french fry exports trended upward over the decade.

Potato chips and dehydrated potato products are also important export products. From 2005 to 2009, chip exports averaged 543 million pounds (fresh-weight equivalent) with an average value of $178 million. During this same period, exports of dehydrated potato products (flakes, granules, flour, meal, and dried potatoes) averaged 966 million pounds (fresh-weight equivalent) with an average value of $82 million.
Few fresh potatoes are exported from the United States, partly because of restrictive phytosanitary import regulations imposed by some foreign countries. Given close proximity to U.S. growing regions, Canada is the leading importer of U.S. fresh table stock and seed potatoes. Mexico, the second-leading foreign market, imports limited amounts of both fresh and seed potatoes. Most fresh potatoes exported to Mexico are reportedly used for processing. Over the past 5 years, Canadian imports of fresh and seed potatoes averaged $79 million, while Mexico's imports averaged $24 million. Exports to Canada are expected to remain about the same, while Mexico has limited potential because of restrictive phytosanitary regulations regarding U.S. fresh and seed potatoes.

Between 2005 and 2009, the United States imported an average of $886 million in potatoes and potato products. Canada is the largest supplier, followed distantly by Mexico, the Netherlands, and Germany. Canada's exports to the United States consist mostly of frozen french fries and other frozen potato products. Mexico mainly supplies chips and prepared/preserved (canned) products, while the bulk of imports from Germany and the Netherlands are starches and other dehydrated products.

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