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Home arrow News arrow Business arrow Potato growers lock in higher price

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Potato growers lock in higher price

Rising production costs hurt Baker County potato growers last year. (Baker City Herald/S. John Collins)
Rising production costs hurt Baker County potato growers last year. (Baker City Herald/S. John Collins)
Contract prices for Baker County potatoes nearly doubled for the 2009 crop, a boon for farmers who watched soaring production costs take a bite out of their profits in 2008.

Most of the county’s 2008 potato crop was grown under contracts paying growers $5.75 per hundredweight (cwt) delivered.

But after enduring rising costs for fuel, fertilizer, labor and other production costs last year, growers negotiated a higher contract price of $10.08 for their 2009 spud crop, said Cory Parsons, Oregon State University Extension agent for Baker County.

Parsons said potato contracts are negotiated nearly a year before potatoes are harvested, so growers know what they’ll receive before the crop is planted.

That provides farmers some security and avoids the uncertainty of selling on the open market.

However, when production costs rise quickly between the signing of contracts and the harvest, as happened last year, farmers’ profits can plummet.

The higher contract prices for the 2009 potato crop will help compensate growers for some of their losses last year, and Parsons said clauses included in contracts for 2009 allow for price adjustments if production costs change dramatically between now and harvest.

“Producers demanded more money to cover higher production costs, and the packers recognized growers came out on the short end last year, so the contracts nearly doubled, subject to ups and downs in production costs,” Parsons said.

Parsons said the Baker County potato production ranges from 3,700 acres to 3,900 acres annually. He said the planted acreage doesn’t vary a lot from year to year because there’s a limited amount of land with irrigation water, topography and soil conditions needed to grow potatoes.

He said the year-end county crop surveys and production figures for 2008 are being compiled by OSU and will be released around the end of January.

However, he said he expects potato production acreage in Baker County will likely show a slight drop because some potato acreage was converted to wheat production last year. That was due largely to record high wheat prices at the end of 2007 and early 2008 that soared from the historical $2.50 to $3 a bushel to $7 to $10 a bushel, with some reports of prices offered as high as $12 to $15 at the tail end of the 2007 marketing year when the wheat supply was scarce.

After seeing wheat rices drop to a low of around $5.50 by the fall of 2008 before rebounding slightly to $6 a bushel last week, Parsons said he anticipates some of the potato ground planted to wheat last year will be returned to potato production in 2009.

While county crop production numbers won’t be released by OSU for a couple of weeks, national and statewide production figures released Tuesday in the National Agricultural Statistics Service’s 2008 Crop Survey show Oregon’s statewide potato production dropped to 18.7 million cwt, down 8 percent from 2007.

The 2008 crop is a far cry from the record 30.7 million cwt produced in 2000, said Chris Mertz, state statistician.

Mertz said a reduction in potato plantings accounted for much of the drop in Oregon potato production.

Potato plantings statewide dropped 1,200 acres from 1.14 million acres planted in 2007. That combined with a drop in yields attributed to cool weather made for a smaller potato crop in 2008, Mertz said.

He said the record high potato yield in Oregon hit 594 cwt per acre in 2005, but yield dropped to 554 cwt in 2007 and fell again to 529 cwt in 2008.

As for Oregon’s wheat crop, the Crop Survey figures released Tuesday show statewide production rose 20 percent to 52.6 million bushels and average yields climbed to 55.7 bushels per acre, up 3.7 bushels from 2007.

“Most of the wheat increase is attributed to increased plantings of wheat in the Willamette Valley, which has higher yields per acre than other traditional wheat growing areas” such as Northeastern Oregon,” Mertz said.

Winter wheat production rose 18 percent to 44.95 million bushels and Oregon’s spring wheat production soared 39 percent to 7.65 million bushels, according to the report.

Last year’s rush to plant wheat also affected production nationally, with all wheat harvest hitting 2.5 billion bushels in 2008, up 21 percent from 2007.

Hay production in Oregon totaled an estimated 2.95 million tons in 2008, including an estimated 1.68 million tons of alfalfa — unchanged from 2007.

Despite growers in Baker County and other areas shifting some acres to wheat, Mertz said alfalfa hay acres statewide increased by about 10,000 acres to 420,000 acres harvested in 2008.

Nationally, all hay production at 145.67 million tons is down 1 percent from 2007. That figure includes 68.62 million tons of alfalfa hay, according to the crop summary.

The statistics service also reported Monday that stocks of all hay stored on Oregon Farms as of Dec. 1 totaled 1.6 million tons, down 8 percent from 2007 and down 15 percent from 2006. Nationwide hay stocks totaled 104 million tons, down less than 1 percent from 2007.

Corn grain produced in Oregon at 6.6 million bushels was also down, from 7 million bushels produced in 2007. Oregon corn grain yields averaged 200 bushels per acre, well above the nationwide average of 153.9 bushels per acre. Nationwide, corn grain production totaled 12.1 billion bushels.

Dry edible pea production in Oregon rose 57 percent to 135,000 cwt, and Austrian winter pea production in Oregon rose 12 percent to 19,000 cwt.

By comparison, nationwide production of dry edible peas was down 25 percent to 12.3 million cwt; and nationwide production of Austrian winter peas dropped 12 percent to 104,000 cwt.

Oregon peppermint production rose 2 percent to 2.67 million pounds in 2008, while national peppermint production dropped 2 percent.

Spearmint production in Oregon was down slightly at 240,000 pounds, and the total U.S. spearmint production is down slightly.

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