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By Dale Lathim, Potato Growers of Washington
Over the past several years, I’ve consistently emphasized a fundamental shift in the potato industry: it is no longer local, regional or even national – it is fully global. Today, success requires understanding not just what is happening in your own community, but what is unfolding across continents.
Recent export data continues to reinforce this reality. Markets that once relied heavily on U.S. potato products are now increasingly supplied by emerging competitors. Countries such as China and India – virtually absent from the global frozen potato market just a decade ago – have rapidly evolved into major players. Today, they represent some of the fastest-growing sources of supply, often delivering product at significantly lower cost.
Yet global competition is only part of the story. An even more immediate and disruptive reminder of our interconnected world can be seen in the surge of input costs following geopolitical instability in the Middle East. The closure of the Strait of Hormuz has triggered sharp increases across key inputs – fuel, fertilizer, crop protection products, equipment and even materials like PVC – demonstrating just how exposed agriculture is to global events.
Fuel prices were the first to react, with road diesel increasing by more than $2 per gallon. This spike could not have come at a more challenging time. Growers are currently in the peak of seed shipping season, sourcing from distant regions such as Montana, Alberta and eastern Idaho. Even prior to this surge, freight costs often added more than 50% to the base cost of seed. With hauling costs now rising another 20% or more, seed expenses have exceeded nearly all preseason projections.
These increases ripple through every aspect of the operation. Fuel surcharges are returning, and any input that must be transported – or is derived from petroleum – faces similar upward pressure. While many growers secured on-farm fuel supplies earlier in the season, those reserves will eventually need replenishment. If current conditions persist, harvest costs could rise substantially.
Fertilizer presents another significant challenge. Fortunately, many growers had already purchased or applied a large portion of their needs before the recent disruptions. However, for in-season applications or for those unable to pre-purchase, pricing has become highly uncertain. In some cases, suppliers are no longer offering fixed quotes, instead pricing at delivery with expectations that costs will be “sky high.” Given that fertilizer typically accounts for 10–20% of total production expenses, this volatility alone could add several percentage points to overall costs.
And this pattern is not isolated. From parts and equipment to storage infrastructure and irrigation systems, nearly every input is affected – either through transportation costs or reliance on petroleum-based materials.
When contracts for the 2026 crop were first negotiated last December, the industry anticipated a modest cost increase of approximately 3%. As of mid-March, that estimate has climbed to nearly 10% with the potential to reach as high as 12%.
This presents a serious challenge for growers. Margins were already under pressure following recent price reductions, and there is limited ability to absorb additional costs. Unlike other sectors in the supply chain, growers have little opportunity to pass these increases forward.
Recognizing this, PGW has initiated discussions with processors to address how the industry can collectively navigate these conditions. While processors face their own constraints – particularly due to global competition and excess capacity – the reality remains that processing facilities depend on a stable supply of potatoes.
This relationship has always been interdependent. Growers need processors, and processors need growers. In times of disruption, that partnership becomes even more critical.
The path forward will require collaboration, transparency and a shared commitment to long-term sustainability. If the industry can align around those principles, it will not only weather this storm, but emerge stronger on the other side.