By Dale Lathim, Potato Growers of Washington
As summer arrives across North America’s potato-growing regions, growers are once again preparing for a season filled with both opportunity and uncertainty. After three consecutive bumper crops in the major potato-producing areas, many in the industry are hopeful that acreage adjustments have finally brought production closer to equilibrium – creating a realistic opportunity to market and process the crop within the traditional 13-month cycle without forcing quality potatoes into lower-value outlets such as livestock feed.
While abundant harvests are generally celebrated throughout agriculture, potatoes present a unique challenge. For fresh-market growers and those with uncontracted production, bumper crops often translate directly into lower prices. Processing growers face a different but equally difficult reality. Most contracts include volume caps that limit the number of potatoes processors will purchase at the full contract price. Any production beyond those contracted volumes becomes the grower’s responsibility to store, market or sell at discounted values.
The result is a familiar paradox: exceptional yields can ultimately reduce profitability. In an ideal scenario, growers would achieve higher yields on fewer acres, creating enough demand for surplus production to command average – or even above-average – market prices. Unfortunately, that is rarely how agricultural markets operate.
The market conditions experienced over the past several years did not develop solely because Mother Nature delivered excellent crops. In fact, the story began with the opposite situation. The 2022 potato crop was one of the shortest in modern history, leading to unprecedented prices for fresh and open-market potatoes. In response, growers and buyers alike increased acreage in 2023 to ensure adequate supplies and avoid a repeat of the shortages and price spikes that defined 2022. When nearly every growing region then achieved normal to exceptional yields, the industry quickly shifted from one of the shortest crops on record to one of the longest.
The same pattern continued into 2024. Concerns about supply remained fresh in the minds of processors and buyers, making it difficult to reduce acreage enough to restore balance. Even as inventories grew, the memory of paying historic prices in 2022 continued to influence planting and procurement decisions.
By 2025, planted acreage appeared much closer to where it needed to be. However, another season of excellent yields and strong quality still resulted in a surplus – albeit a much smaller one than the previous two years. The industry made progress, but true balance remained just out of reach.
Today, there is reason for optimism. Many industry participants believe production and demand may finally be aligning more closely. Achieving that balance is critical because the potato industry operates through one of the most interconnected business relationships in agriculture. Processors invest hundreds of millions of dollars in facilities designed exclusively to process potatoes. Growers invest tens of millions in specialized equipment, storage infrastructure and production systems that are economically viable only for potato production. Neither side can succeed without the other.
That interdependence extends directly to pricing. Processors must periodically increase prices to offset rising operating costs while also supporting the inflationary pressures growers face each season. Yet meaningful price improvements are difficult to achieve when either potatoes or processing capacity are in surplus. The past three years have challenged both sides of the equation. Processor margins have tightened, while growers have watched many of the contract-price gains achieved during the 2021 and 2022 negotiations gradually disappear. Looking ahead, meaningful improvements in grower returns will likely depend on restoring and maintaining balance between production and processing capacity.
As we move deeper into the growing season, one thing is clear: the long-term health of the potato industry depends on balance. Balance between supply and demand. Balance between processor and grower profitability. And balance between innovation and stewardship. If the lessons of the past several years have taught us anything, it is that sustainable success comes not from extremes, but from finding the middle ground where every segment of the industry can thrive.