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Potato producers finding big market in frozen fries.

Almost as many potatoes are being sold now for french fries as for fresh use.

Considering the popularity of fast food chains featuring french fries, that might not be surprising. What surely is startling, though, is how quickly this potato-use parity came about:

In 1960, American consumption of fresh potatoes, on a per capita basis, was 81 pounds a year. The per capita consumption of frozen potatoes--largely french fries--was just 7.6 pounds a year (on a fresh-weight basis). By 1989, fresh potato use had plummeted to about 50 pounds a year, while frozen potato consumption had risen by nearly 40 pounds, to about 46 pounds.

According to economist Gary Lucier of USDA's Economic Research Service, the most significant change over the past 30 years in the potato industry has been the surge in frozen use and the decline in fresh use. The success of fast food restaurants lies behind much of the shift toward frozen potato use.

In fact, in 1989 about 87 percent of frozen french fries (4.5 billion pounds) was sold by foodservice outlets. And during the 1980's, the popularity of frozen french fries also increased in countries not known for potato consumption, particularly East Asian nations.

"In Japan, Taiwan, and South Korea, American-style fast food outlets expanded rapidly," says Lucier. "A positive byproduct of this for the U.S. potato industry has been strong gains in exports of frozen french fries."

Domestically, the success of frozen potato products and increased demand for potato chips and products made from dehydrated potatoes have suurred total U.S. per capita use from 106 pounds in 1959 to 126 pounds in 1989. And measured by per capita use, only wheat flour and dairy products exceed potatoes in importance in the American diet.

A Prominent Place

"Obviously, potatoes occupy a prominent place in American agriculture," says Lcier. "The 1989 potato crop was valued at $2.5 billion, contributing substantially to the farm revenue of many States. Maine and Idaho received 34 and 22 percent, respectively, of their 1988 farm cash receipts from the sale of potatoes."

In addition, potatoes account for billions of dollars of economic activity throughout the U.S. economy from such things as purchases of farm inputs (fertilizer and machinery used to grow potatoes, for example) to sales of french fries in fast food restaurants.

Although all 50 States report producing at least some potatoes, most U.S. potato production is concentrated in 9 States, according to statistician Arvin Budge of USDA's National Agricultural Statistics Service.

"These nine States have consistently produced about 83 percent of the U.S. potato harvest over the past few years," says Budge. "Idaho is by far the leading producer, accounting for about 28 percent of the 1989 crop. Washington is a distant second, with 17 percent of the 1989 crop."

The other seven big producers are North Dakota, Maine, Wisconsin, Colorado, Minnesota, California, and Michigan.

According to the 1987 Census of Agriculture, Hawaii was last in potato production and Arkansas next to last. Census figures show that, in 1987, 37 States had potato output of 4 million hundredweight (cwt) or less, and 33 of these States produced less than 1 million cwt.

Whatever the state of the Nation's latest potato harvest, there's never any paucity of potato statistics.

Whether it's price, production, or stocks, USDA has the facts. No less than 12 major reports provide potato data considered indispensable by producers, distributors, and retailers, says ERS economist Gary Lucier.

Topping the list is Potatoes, an annual report issued by USDA's National Agricultural Statistics Service (NASS), which carries potato supply, disposition, and value estimates, by State, for the past two seasons.

If information is needed more quickly, there's Crop Production, which estimates potato production every month of the year except December. The first estimate of total planted acreage is carried in the July report, and the first estimate of fall-crop production is in the November report.

Potato Stocks, issued monthly by NASS from December to May, includes the revised fall-crop production in December, fresh fall-crop potato stocks from 15 major States, and processing potato use in 8 major States. Breaking down stocks a bit further is the monthlY Cold Storage, also by NASS, which estimates stocks of frozen potatoes in the Nation's frozen food warehouses.

On the price front, there's the monthly (with an annual supplement) NASS Agricultural Prices, which includes estimates by State of monthly grower prices for potatoes, with a breakout of fresh and processing prices for Idaho and the Unites States.

A good companion to Prices is Crop Values, a NASS annual that contains State-level estimates of the marketing year average price and value of production of major crops, including potatoes.

Another guide is Fresh Fruit and Vegetable Prices. Produced annually by USDA's Agricultural Marketing Service (AMS), it compiles weekly USDA market news reports into monthly price observations for leading f.o.b. shipping points and New York and Chicago wholesale prices.

To find out where potatoes are coming from and where they're sent, there's Shipments and Arrivals--a weekly AMS report. It describes the volume of potatoes originating from major shipping points and the volume arriving at major cities. Annual supplements give detailed information on a monthly basis.

Getting a grasp on the international scene is easy with Foreign Agricultural Trade of the United States. Published monthly (along with annual supplements) by ERS, FATUS compiles and presents U.S. Department of Commerce trade data (in volume and value) for potatoes and potato products.

A further aid is the Horticultural Products Review, issued monthly by USDA's Foreign Agricultural Service. It contains the latest trade information for horticultural crops (including some potato products) and analysis and features on commodities.

A good overview of the potato industry is contained in Potato Facts, issued twice a year by ERS. Among the items covered in Facts are acreage, production, prices, trade, and use. Also helpful is the Vegetables and Specialties Situation and Outlook. Produced three times a year by ERS, this report brings together statistics for vegetables (including potatoes) from various sources and presents brief analyses of market trends.

USDA's statistical interest in potatoes isn't a recent phenomenon.

"Potatoes were among the first crops for which USDA estimated production in 1866," says NASS statistician Arvin Budge. "Potato acreage then was about 1.25 million acres, the same as today."

Production was nearly 67 million cwt in 1866, about equal to the amount grown last year in Washington State. From 1866 to the 1920's, production rose steadily due to expanding acreage. In 1922, acreage for harvest peaked at 3.9 million acres, but then declined toward the present level, about 1.1 million.

"The production trend continued steadily upward because of improved yields even as acreage decreased," says Lucier. "Current U.S. production is around 400 million cwt."

Early yields were about 50 cwt per acre and held close to that level until the 1920's. It was about this time that Luther Burbank improved potato breeding, leading to the development of the Russet Burbank, today's top variety.

Yields began soaring in the 1940's and now average around 300 cwt per acre.

"Yields were boosted to present levels by the use of commercial fertilizers, improved breeding and cultural practices, and the shift of acreage to Western States where irrigation is used extensively," Lucier says.

Potatoes have returned $1.5 billion to $2.5 billion annually to U.S. growers in recent years and rank seventh in importance among American crops," says Lucier. "Even so, the United States produces only about 6 percent of the world's potatoes, ranking fourth behind the USSR, Poland, and China."

Westward Movement

Since the 1950s, most U.S. potato production has gradually been shifting westward. In the late 1800's, production was centered in New York, Pennsylvania, and Ohio. As the population moved west, so did potatoes.

"Michigan and Wisconsin came on the scene in the early 1900's, but New York remained the leading State until Maine took over in the mid-1920's," says Budge. "Rail transportation and the refrigerated railcar helped Idaho, Colorado, and California compete in distant U.S. markets during the 1930's and 1940's."

However, Maine stayed the leading producer until the late 1950's, when the rising popularity of processed (especially frozen) potatoes vaulted Idaho into the lead with its Russet Burbank variety (which is excellent for frying).

The percentage of the potato crop used for processing has nearly tripled over the last 30 years. In the 1989/90 marketing year, about 54 percent of the crop was processed and 31 percent was sold as fresh table stock. This compares with 19 percent processed in the 1959/60 marketing year, when fresh use dominated.

Processors used about 201.6 million cwt of potatoes in 1989/90, of which 59.3 percent was frozen, 21.9 percent chipped, 16 percent dehydrated, and 2.4 percent canned. About 85 percent of the 1989/90 was used for human consumption, with the remainder going for seed (7 percent), animal feed (1 percent), or being lost to pests and disease (7 percent).

"Currently, Idaho, Washington, and Oregon combine to produce half the U.S. crop, with much of this output processed into frozen french fries," says Lucier. "The rise of extensive chipping potato production in North Dakota and Minnesota--along with new seed varieties--has pushed the Red River Valley into a heavy supporting role."

In 1953, the fall potato crop accounted for 65 percent of the U.S. total. Over the last 35 years, potato production has become more concentrated, with the fall crop now comprising about 85 percent of the U.S. total. Much of the fall crop is placed in storage to provide a steady supply for fresh and processing use throughout the winter and to furnish seed for the crop in the coming year.

"Potatoes are produced throughout the year in the United States," Lucier notes. "During the winter, they are grown in California and Florida. In the spring, California and several Southern States produce potatoes. During the summer, Southern and some Central States produce a crop similar in size to the spring crop. The fall crop is produced primarily in the Western, Northeastern, and North Central States."

Numerous varieties of potatoes are grown, but three general categories are Russets, Round White, and Red. Russet potatoes account for the largest share of the U.S. crop and are heavily concentrated in Western States. These varieties are grown for both fresh market and processing and are particularly well suited for frozen french fries.

Round White potatoes are grown nearly everywhere in the United States, with heavy concentration in the Northeast and Central States. These varieties are used for potato chips and fresh marketing. Red potatoes are grown mainly in the Central States and are used mostly as fresh-pack table potatoes. Yellow- and purple-skinned potatoes, although gaining in popularity, are still largely specialty items.

A Long History

Potatoes are native to South America, although Europe was the point of origin for the first potatoes brought to the North American continent.

"Potatoes were discovered in Peru by Spanish conquistadores in 1537, even though the Incas had been cultivating them for centuries, according to evidence dating back to the second century A.D.," says Budge. "The Spanish shipped potatoes back to Europe as a new food crop. Three centuries later, the potato's prime importance in some European countries was tragically demonstrated with the massive failure of the Irish crop from blight in 1845/46 and the widespread famine that followed."

As many as 2.5 million people perished from starvation and disease in Ireland, he adds. Another 1 million emigrated to the United States.

"Ireland was likely the source of the first potatoes introduced to North America," says Lucier. "A group of Presbyterian Scotch-Irish brought the potato along with them when they arrived in America in 1719 and settled near Londonderry, New Hampshire.

And although potatoes were slow to catch on because of superstition and prejudice that they were poisonous or just too plain, potatoes have become the most important vegetable crop in the United States, providing vegetable producers with one-fifth of their cash receipts.
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Publication:Frozen Food Digest
Date:Feb 1, 1992
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