Tight potato supplies out of Wisconsin could get even tighter in the gap between the end of the 2010 storage crop and the beginning of the 2011 harvest.
Rosholt, Wis.-based Bushmans’ Inc. will supplement its late summer supplies with potatoes from a New Brunswick shed and an Ohio shed, said Mike Carter, the company’s chief executive officer.
“We’ve held back, but we won’t make it all the way through” with Wisconsin potatoes, Carter said. “We’ve been preparing, we have a plan in place and our customers won’t see anything out of the ordinary.”
Because markets have been strong for months, shippers and buyers shouldn’t have trouble making a smooth transition from old crop to new, Carter said.
“I don’t see any wild swings in the marketplace,” he said. “Supplies have been tight for a while.”
However, Tom Lundgren, owner and president of Stevens Point, Wis.-based Spud City Sales LLC, thinks the transition could be a wild ride.
“It’s going to get crazy — it already has gotten crazy,” Lundgren said. “There’s not a lot of production out there.”
Wisconsin potato prices were in the low $20s for 50-pound cartons of 40-70s in early July.
By that time, only a couple of Wisconsin shippers were still shipping old-crop potatoes, Lundgren said.
But he said new-crop russets likely wouldn’t start shipping until the second or third week of August.
“Everybody’s anxious to come on, and nothing’s coming at this point,” he said.
The gap typically would be filled by states such as Kansas and Nebraska, but even that’s not a guarantee this year, Lundgren said.
“They haven’t had the best growing conditions down there either,” he said.
Friesland, Wis.-based Alsum Farms & Produce Inc. expects its Wisconsin russet supplies to wind down about July 15, said Larry Alsum, the company’s president and general manager.
The company expects a Kansas deal to kick off at about the same time, so there shouldn’t be a gap, Alsum said.
That doesn’t mean customers won’t be eager for the 2011-12 Wisconsin season to get under way.
“I expect very strong demand” at the beginning of the deal, Alsum said.
Dick Okray, co-owner of Okray Family Farms Inc., Plover, Wis., said 2011-12 supplies likely would last into late July.
The problem is, he said, new-crop potatoes may not start shipping until about mid-August.
Okray Family Farms has helped stretch its summer crop by sourcing from California, Arizona, Texas and Florida and other growing areas. But late starts in some of those regions — Kansas and Nebraska, for example — has made filling that gap more complicated, Okray said.
What shippers have in their favor, he said, is that no one is surprised by the current supply situation.
“Everybody’s feeling this push, but it’s not like we didn’t know about it,” he said. “We knew it in November, December, and we’ve taken great pains” to stretch the 2011-2012 crop.
The transition from the 2010-11 to the 2011-12 crop worries Okray some — particularly if russet prices get even higher.
At the back of his mind, Okray hears the old adage about pricing, “The higher they go, they further they fall.”
“It’s always a worry,” he said. “There’s the possibility of some demand destruction, which is never good.”
And when the new crops start coming in and everybody’s pushing their supplies at the same time, people can get nervous and markets can start to teeter, Okray said.
Bob Johnson, president of Katz Produce Sales LLC, Plover, expects his company’s supplies to run out by about July 10.
New russet volumes from Wisconsin likely won’t start shipping until Aug. 18-19, he said.
“It’s a problem,” he said. “Everybody’s geared up to supplement, but those (mid-summer) deals are late too. Supplies will be extremely tight for the next few weeks.”
Retail ads likely will be very scarce or nonexistent until new-season product begins shipping, Johnson said.
On the foodservice side, buyers who didn’t plan accordingly in advance could be in trouble, he said.
“In foodservice, there are a lot of contracts, which tends to amplify the shortage,” Johnson said. “There’s not much available (for non-contract supplies).