They were hot during winter, they’ve been hot so far this spring, and russet potato markets show no signs of cooling off.

Expect russet prices to remain sky high

In fact, they could get even hotter this summer.

On April 26, the U.S. Department of Agriculture reported prices of $22-24 for 50-pound cartons of Idaho russets 40-60s, up from $9-10 last year at the same time.

Wisconsin russets 50-70s were $18-19, up from $7-7.25 last year at the same time.

Dick Okray, co-owner of Okray Family Farms Inc., Plover, Wis., said the market’s performance since Christmas has been unprecedented.

“I’ve never seen them this high for this long of a time,” Okray said. “1979, 1980 was the last time we’ve seen prices like this.”

High, then higher

Typically, shippers haven’t seen such high prices until May, said Kevin Stanger, senior vice president of sales for Wada Farms Marketing Group LLC, Idaho Falls, Idaho. It’s very rare, he said, for them to get so high so early in the year.

Prices will likely stay in their current range until this summer, when they could go up, Stanger said.

“We could see some pretty strong prices later in the season,” he said. “Whether it’s 1 or 2 dollars (per box), or 5 or 8, I don’t know.”

Low supplies are the main reason for the super-strong markets, Okray said, though recent consumer data suggested demand was on the upswing, too.

A recent survey by the Denver-based U.S. Potato Board found that 18% of consumers think potatoes are fattening or have other negative attitudes about potatoes, down from 24% last year and from 30% in 2007.

The survey also found that potatoes are served in 29% of American dinners, second in frequency only to poultry.

'Sweet spot'

Retail movement was running about 10% below normal in late April because of the lower volumes, said Lee Frankel, president and chief executive officer of United Potato Growers of America, Salt Lake City.

Shippers will have to work closely with retailers in coming months to manage supplies so that prices stay in what Frankel refers to as their current “sweet spot:” reasonable for consumers, but profitable for shippers, retailers and foodservice purveyors.

United Potato Growers has scheduled a June meeting in Minneapolis to discuss with shippers strategies for managing the rest of the 2010-11 crop, Frankel said.

What will happen to Wisconsin russet markets in the coming months depends on new crop harvests in California, Texas, North Carolina and other states, Okray said, but he doesn’t expect prices to go down this spring or summer.

A cold start to the spring planting season in Idaho, Washington, Wisconsin and other states could raise prices this summer, if harvests in those states are delayed, Frankel said.

Some foodservice customers of Des Moines, Iowa-based Loffredo Fresh Produce Co. scaled back tomato orders when prices soared in recent months, but so far, the same hasn’t been true for potatoes, which are still a good value, said Bill Day, foodservice sales manager.

“A lot of restaurants are in a ‘grin and bear it’ situation,” he said. “Potatoes could double in cost, and they’re still not going to change their menus and pricing. It’s different when tomatoes go to $70 a case.”

Don Odiorne, vice president of foodservice for the Eagle-based Idaho Potato Commission, agreed that restaurants have been reluctant to scale back their potato programs.

“You can’t walk away from your menu — it’s pretty hard to substitute,” he said. “I haven’t seen demand go down.”

What some restaurants are doing, Odiorne said, is saving money by buying smaller, less expensive potatoes. Instead of buying 40s or 50s, some chains are switching to 70s or 80s.

Some restaurants may have avoided the price spike in russets because of contract pricing, but Odiorne said shippers, anticipating a supply crunch, were much less likely to sign long-term contracts this season. Quarter-long contracts have been more common, he said.