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By Dale Lathim, Potato Growers of Washington
It’s been a few years since there has been a great deal of talk about consolidation in the potato growing community. The demand for frozen potato products has grown over the past few years, and the ever-increasing volume of potatoes needed to feed that demand has kept the number of growers fairly stable. However, with the reduction in volume by our largest processor impacting so many growers, it looks like fewer entities will be growing potatoes in 2025.
Over my time in the industry, the growing community has experienced a great evolution, as we have gone from more than 400 process contract potato growers producing a little over 120,000 acres of potatoes in the Columbia Basin to fewer than 70 growers producing approximately 170,000 acres this year.
While the consolidation was happening at an alarming rate, it seemed to pause – with the number of growers holding steady, and in some years, slightly increasing – as a new generation of growers started to form. This was attributed to the challenge of producing enough potatoes to keep up with the ever-increasing demand for products and our lower yielding crops in 2022 and 2023. With the return to near trend-line yields in 2024 and too many acres contracted by a major processor, the need for acres in 2025 is the lowest that we have seen in a long time in relation to the number of acres growers had planned on.
I will give credit where credit is due: the company that is making the big reduction in contract volume is doing al that it can to protect the future of as many growers as possible by not growing any potatoes on its own farm this year. But following the massive cut that was implemented on the annual contract grower in 2024, any further reductions will eliminate a few growers, and a few others are coming to the conclusion that the risk involved in growing potatoes is becoming too great for the few contracted acres they have remaining.
I hate to see this happening as I know that most of the smaller growers who are facing this dilemma truly love raising potatoes and that is why they have hung on as long as they have. Unfortunately, the capitalistic forces that drive our economy do result in some very harsh realities. One of those is that the big will keep getting bigger. No matter what industry you investigate, the same dynamics result in this outcome. It is nothing personal against the small grower who may no longer be growing potatoes, nor should the larger grower who absorbed some of those acres feel guilty about taking the extra offered acres. Economic survival means that hard economic decisions must be made. If the overall industry growth had remained on the trajectory forecasted just a year ago, we would be wondering where we were going to find enough growers to meet the demand in the future. But instead, we must accept the inevitable fact that we will have fewer growers going forward.
On paper, the potato contracts for 2025 look to be very reasonably priced and should generate very respectable profit with even an average crop. Since the other rotation crops are mostly at near record low prices in relation to the cost to grow each of them, our potato contracts become even more important. While the processors keep saying they do not want the potato contracts to carry the entire farm, they must see that for the past few years when profits on potato contracts have been shrunk, it was the rotation crops that propped up the rest of the farm. There may be some years in the very near future that more will need to be added to the potato contracts in order for the entire farm to be sustainable or we will be seeing a much greater number of consolidations than we see today.