Organic Russet Supplies Tight Until Summer

The 2022/23 storage crop of all potatoes is down as much as 5 percent from the previous season, causing packers to limit shipments in an attempt to stretch supplies until the new crop of potatoes starts being dug in late spring. This is true across the board for most storage potatoes but is being felt more acutely in the organic russet potato sector.

“There is definitely a shortage of organic russets,” said Rob Greenwood, program development manager for RPE Inc. in Bancroft, Wisconsin. “Organic reds are always a bit tight this time of year, but they are tighter this year. Organic yellows are doing okay, and they appear to be on track until the West Coast starts up with new potatoes. The situation with organic yellows is not quite as dire.”

Rob Greenwood, Program Development Manager, RPE Inc.

There are very few retail promotions for organic potatoes, Greenwood said, and in fact, “we are urging retailers not to promote.”

The ultimate goal is to stretch the available supplies into summer, but that is going to be a difficult task. “It’s going to be an interesting spring. From late April or early May to at least mid-June, we are going to be searching for potatoes,” he said. “There is a distinct possibility that there will be a gap on organic russets. In fact, we are preparing for a gap.”

“There is definitely a shortage of organic russets. Organic reds are always a bit tight this time of year, but they are tighter this year. Organic yellows are doing okay." - Rob Greenwood

The same general situation is happening on conventional potatoes, but it is not as acute simply because the pool of available supplies is so much bigger, Greenwood said. “On the organic side, there are a smaller number of bins to choose from. If you lose a bin (to disease or other quality issues), it makes a much bigger impact on your supplies.”

The market price is reflective of the situation as it has risen 10-20 percent in recent weeks.

RPE also sells a significant volume of organic specialty potatoes on a year-round basis from its sister company, Arvin, CA-based Tasteful Selections. “We have enough volume to fill our contracts,” Greenwood said, "but currently supplies of both organic fingerlings and purple potatoes are tight."

Lonnie Gillespie, chief organic officer at Farm Fresh Direct of America in Monte Vista, Colorado, articulated a similar viewpoint when talking about organic russets. “We are seeing an unprecedented shortage of organic russets at both Farm Fresh and nationwide,” she said this week. “Organic yellows and reds are not packing out with the quality we want to see, but there are enough supplies to get us through the season.”

Lonnie Gillespie, Chief Organic Officer, Farm Fresh Direct of America

The ultimate goal on the russets, she said, is to stretch those supplies so there isn’t a gap. “What we are trying to do is work out deals to get [organic] yellows and reds at a price point that gives retailers something to sell and gives consumers some potatoes to buy at a reasonable price.”

The increase in the volume of number 2s on the reds and yellows is helping that strategy as Farm Fresh is marketing those potatoes under its number 2 label at a significantly lower FOB price than the russets. How well that strategy works will determine if the grower-shipper gaps between storage russets and its new-season crop out of Colorado, which typically hits the market in July.

“What we are trying to do is work out deals to get [organic] yellows and reds at a price point that gives retailers something to sell and gives consumers some potatoes to buy at a reasonable price.” - Lonnie Gillespie

Gillespie was reluctant to discuss where the FOB price is headed on organic russets. “There is incredible price pressure, but we are trying hard not to put the FOB at such a place where consumers can’t get a reasonable price in the grocery store,” she said. “We don’t want to go crazy on the price.”

The organic russet shortage is due to a combination of factors, including less acreage and some hurdles from Mother Nature, which led to lower yields. Currently, Farm Fresh is planning for the 2023 season and will begin planting in April. “We have replaced our lost acreage, and we are hoping Mother Nature is kinder this year and we get better yields,” Gillespie said.

Eric Beck, director of marketing for Wada Farms Marketing Group in Idaho Falls, ID, agreed that the reports about russets being short are spot on … for both organic and conventional supplies. “The 2022 crop acreage was down to historic lows,” he said. “There is plenty of data out there that shows acreage was off 3 to 5 percent or whatever the number is. The fact is demand has superseded supply. There is a lot of volatility in the market right now.”

Eric Beck, Director of Marketing, Wada Farms Marketing Group

Over the last few years, the FOB market on potatoes has been strong, Beck said, but this year it could reach historic levels. “We are seeing good healthy returns for growers.”

Speaking specifically of the organic potato market, Beck said supplies are tight and getting tighter. “Everyone is trying to stretch their supplies,” he said. “By mid-April, we are going to see shortages.”

“We are seeing good healthy returns for growers.” - Eric Beck

In the April/May time frame, there will be some new potatoes from California and other regions joining the game, which will help the organic supply situation through summer.

As a point of reference, on Tuesday, February 21, USDA’s Market News reported that a 50-pound carton of number 1 organic russets was selling for $53-$55 on the San Francisco Wholesale Produce Market, while a conventional 50-pounder of the same potato variety was in the $23-$25 range.