Expert: Idaho potato industry has too much capacity

A former Potato Growers of Idaho executive director believes Idaho’s capacity to produce and pack potatoes has outgrown the market, at the expense of growers.

Jim Chapman, now retired in Arizona, spoke on the overcapitalization of Idaho’s potato market Jan. 21 during the 47th Annual University of Idaho Potato Conference.

“Overcapitalization is when an industry builds more capacity to produce than there is a marketplace for,” Chapman said. “That leads to a glut of supply and economic hard times for those who produce in the industry.”

He urges growers to lengthen rotations between potatoes, which decreases supply and improves soil tilth and tuber quality.

As potato profit margins have tightened, Chapman said, Idaho growers have increased acreage and shortened rotations between potatoes to remain profitable. Farming more ground has allowed growers to reduce per-acre equipment expenses and buy inputs in bulk.

“You can keep improving your economic livelihood by expanding, and that’s what has happened,” Chapman said.

University of Idaho Extension economist Paul Patterson believes the cumulative damage caused by grower expansion outweighs the savings. For every 1 percent increase in the state’s spud crop size, Patterson calculates potato prices drop about 7 percent.

Patterson said Eastern Idaho farms that once had cows have specialized in spuds and cut alfalfa from rotations. He said most rotations have shrunk from five crops to three crops.