By Bruce Huffaker, Publisher, North American Potato Market News
Potato yields have been in a constant uptrend since World War II. Between 1900 and 1940, the average annual yield increase was less than 0.5 cwt per acre. Between 1940 and 1950, the national average potato yield jumped from 80 cwt per acre to 153 cwt per acre, an average of 7.3 cwt per year. Since 1950, the average annual increase has been 4.3 cwt per year. The relentless uptrend has been a boon for consumers. The consequences for potato growers have been mixed.
Causes
The trend yield is a large-scale phenomenon, the result of interactions between several competing forces in the marketplace. Yields on any given piece of ground are determined by growing conditions, disease pressure, cultural practices, and inputs of seed, water, fertilizer and chemicals. In general, those factors have been improving over time, which has been a driving force in the yield trend. The trend has been augmented by shifts in production from less productive ground to more productive fields.
Unintended consequences of World War II drove the surge in potato production between 1940 and 1950. During the war, the U.S. needed nitrogen to produce the explosives needed to produce bombs. Even before the war ended, manufacturers had excess nitrogen production capacity. Crop production offered a compelling market for the excess nitrogen production. Ready availability of cheap nitrogen triggered a yield revolution for all cropland agriculture, including potatoes. The resulting surge in crop yields provided the platform that has encouraged the development of improved cultural practices, variety development, improved seed quality, irrigation technology, disease and weed control, etc. All of those factors support the upward trend in yields.
Yields on individual farms do not follow a trend. The introduction of successful farm improvement practices can boost yields on the adopting farm by 50 cwt per acre, or more, during a single year. The reasons that large-scale yields trend upward more gradually are complex, involving adoption rates for new farming practices and technology, the fact that innovations are not universally applicable and the potential for innovations to fail.
Is there a limit to how high yields can go? While it is not hard to imagine that there is some limit beyond which ground cannot hold potatoes, in practical terms that limit is well beyond the current trend yield. Reports of potato yields in excess of 1,000 cwt per acre on individual fields are becoming more common. The current yield estimate for the 2018 U.S. potato crop is 444 cwt per acre. That exceeds the 20-year trend yield by 6 cwt. At the average yield growth rate since 1950, 4.3 cwt per acre per year, it would take 130 years for the national average yield to reach 1,000 cwt per acre. In practical terms, it seems safe to say that average potato yields are likely to continue increasing for the foreseeable future.
Consequences
Yield improvements have been a boon for consumers. They have allowed inflation-adjusted prices for potatoes to decline over time, making them more affordable. Consumers have access to more variety of potatoes and potato products and better quality than has been available in the past. However, the agricultural revolution has expanded the selection of all food items, making it easier to spread food dollars between a wider variety of products.
The impact of yield improvements on farming operations has been more checkered. Growers must be continually seeking new and improved ways to produce their crops in order to keep ahead of the trend. Yield improvements are not automatic. If farming practices remain unchanged, so do the results. While being on the leading edge of technology involves risk, growers that fall behind find themselves in an unenviable position. They face higher production costs than their competitors. They usually are unable to sell crops for enough to make the improvements needed to catch up. Equipment maintenance and replacement falls behind. Growers in that position find their operation in a downward spiral that is difficult to escape.
Potato yields continue to grow faster than demand for potatoes. Finding alternative uses for potato ground that is no longer needed is a major problem for growers. In general, growers who boost yields see no reason to cut back on acreage. Those on the leading edge of technology typically have lower production costs and can weather the lower prices resulting from surplus production better than growers who have fallen behind. Market conditions eventually force acreage cuts, but the process is painful for all involved.
USDA reports that growers harvested 1.025 million acres of potatoes in 2018. During the last 50 years, the largest harvested area for potatoes was 1.426 million cwt in 1996. With a 444 cwt per acre yield, that much ground would have produced 633 million cwt of potatoes in 2018. That is 180 million cwt more than the actual crop. The all-time peak in U.S. potato acreage was 3.901 million acres in 1922. However, acreage peaked at different times in different states. The combined total of peak acreage for each of the states is 6.031 acres. Obviously, growers have had to find alternative uses for a lot of potato ground. That process will continue in the future unless demand growth starts to outpace the growth in yields.
Staying ahead of the yield trend is a challenge for growers. It may not be possible on marginal potato ground. Some growers have managed to prosper by growing specialty products that command higher prices. While that may be a viable solution, it will not remove growers from the necessity of finding ways to improve yields and cut costs. While it changes the competitive platform, competitors will still be seeking ways to improve profitability. Those who fail to make improvements are likely to find their operations falling into a downward spiral.
Huffaker’s Highlights:
- The relentless upward trend in potato yields will continue for the foreseeable future.
- Potato acreage will need to continue declining as long as yields rise faster than demand.
- Finding ways to stay ahead of the yield trend is the key to survival and prosperity in the potato industry.
- Operations that fall behind the yield trend face the prospect of a downward spiral in their financial fortunes.
