Potato packaging – WEST AG INFORMATION NETWORK
The cost of packaging Idaho’s most famous product, potatoes, has increased by at least 36% over the past two years.
That’s according to a new report funded by the Idaho Grower Shippers Association, which represents Idaho’s potato shippers, growers, marketers and processors.
“That’s a pretty significant increase,” said IGSA President Shawn Boyle. “It’s pretty drastic.”
This is the first time this type of study has been done on the potato packing industry and he said it is likely that the 36% increase is greater than the total increase over the of the previous 20 years combined.
“It hit us hard and fast,” Boyle said of the rising cost of packaging potatoes over the past two years. “Potato growers are facing abnormal price increases, for fertilizer and fuel and all other inputs, and packhouses are seeing the same.”
The report, which was conducted by agricultural economist Ben Eborn, owner of North American Potato Market News, looked at what it costs to pack potatoes in Idaho after the potato harvest.
Simply put, the report looked at just five major cost categories related to potato packaging: the cost of packaging potatoes has increased by 47% over the past two years, the cost of labor increased by 28%, the cost of repairs increased by 17%, the cost of chemicals increased by 48%, and the cost of picking up and transporting potatoes from the warehouse increased by 31 %.
It’s not just the cost of packing potatoes that’s gone up, but the cost of growing and harvesting Idaho potatoes has also gone up dramatically, state officials say. ‘industry.
“The cost of growing potatoes has gone up dramatically,” said Travis Blacker, director of industry relations for the Idaho Potato Commission.
He said the cost of growing potatoes in Idaho this year will be the highest on record.
In an annual study funded by the Idaho Potato Commission, Eborn also calculates the cost of growing Idaho potatoes each year.
That report isn’t done yet for 2022, but Eborn said it looks like the cost of growing potatoes in Idaho will go up another 15-20 percent this year, at least.
It is difficult to know how high the increase will be, he said, because the cost of key inputs such as fertilizers, chemicals and fuel are not fixed and are changing rapidly.
The price farmers receive for their potatoes has risen dramatically over the past year, but costs have risen by at least as much, he said.
“Growers and packers have to get a high price just to break even,” Eborn said.
Data for the report was collected from input suppliers, machinery and equipment dealers and potato shippers.
The IGSA plans to continue reporting on an annual basis and track potato packing costs over time.
One of IGSA’s missions is to educate and advocate for the potato industry, said President Klade Williams, who is involved in the potato growing and packaging industry. earth.
The council decided to fund the report to educate industry stakeholders about the steep cost increases facing the potato packing industry, he said.
“Packing sheds can no longer continue to drive down these increased costs to their growers and growers can no longer bear the burden of rising costs,” Arrowhead Potato Co. CFO Williams told Rupert. .
The agricultural side of the equation has been hit with even larger percentage increases, he said.
“At our current levels, it’s hard to be sustainable when we’re faced with these types of cost increases,” Williams said.
Boyle thinks most people, from consumers to big buyers, will understand that “what our industry is facing in terms of rising costs is exactly what everyone else is facing. If they want to stay in business and stay relevant, they have to pass on that cost. »
He said the report is a direct and easy way for people to understand the magnitude of the cost increases the industry is facing.
“When your costs go up like that, it’s hard to keep operating the way you’ve been doing,” Boyle said.
Blacker said the rising cost of growing and packing potatoes is indicative of what is happening in agricultural countries.
“It’s certainly not just potatoes; that’s all,” he said.
“These types of increases are probably a good indication of what the entire potato industry in the United States is facing and, indeed, what all of agriculture is facing,” did he declare.