Potato Grower

44 POTATO GROWER | NOVEMBER 2018 OBSTACLE COURSE Serious challenges temper opportunities in export markets Potatoes USA By John Toaspern Chief Marketing Officer For the past 20 years, the potato industry has enjoyed tremendous growth in exports. However, the rate of growth has slowed in recent years. The international marketplace provides U.S. potato growers and processors with tremendous opportunities, but new challenges will hamper the ability of the potato industry to take advantage of them. On the positive side, world trade in potatoes and potato products keeps expanding, up 84 percent in value and 48 percent in volume from 2013 to 2017. Additionally, it appears that for the coming year, the main export countries in the European Union will face raw product supply issues. On the negative side, U.S. potato exporters face increasing competition, higher tariffs than our competitors, a strong dollar and high transportation costs. For the past 20 years, the potato industry has enjoyed tremendous growth in exports—up 175 percent from 1998 to 2017. However, the rate of growth has slowed the past five years and was only 2.4 percent for the July 2017 to June 2018 marketing year, with overall volume actually declining. This slowing of growth is mainly attributable to the lack of supply in the U.S. and increasing supply in competitor countries, particularly in the EU and China. Potato production and processing capacity in Belgium, France, the Netherlands and Germany grew by 19 percent from 2013 to 2017, while U.S. supplies remained basically flat. The result has been a decline in U.S. market share. For example, from 2012/13 to 2016/17, the U.S. share of the frozen market dropped from 77 to 73 percent in Japan, while the EU increased from 7 to 16 percent. In the Philippines, the U.S. went from 69 to 42 percent, and the EU went from 25 to 43 percent. In Korea, the U.S. declined from 90 to 79 percent, with the EU increasing from 5 to 8 percent and Canada going from 1 to 9 percent. The future could be even more problematic as the U.S. adopts anti-trade policies such as the withdrawal of the U.S. from the Trans-Pacific Partnership (TPP), the renegotiation or potential withdrawal from the North American Free Trade Agreement (NAFTA), and the imposition of protectionist duties on a wide range of goods from China and other suppliers under Section 301 and Section 232. As a result of the Section 232 tariffs placed on steel and aluminum imports from Mexico, Mexico has imposed a 20 percent tariff on frozen potato imports from the U.S., while Canadian product will continue to enter Mexico duty-free. When this same duty was implemented as part of the NAFTA trucking dispute in 2009, U.S. exports for the 24 months were down more than 50 percent. www.rdoequipment.com Call 888-877-7935 or visit your local RDO Equipment Co. store. WASHINGTON Coulee City Moses Lake Othello Pasco Ritzville Sunnyside OREGON Hermiston Pendleton Wasco Equipment for all your needs: RDO does that. 1963-17RDOEquipment13h.indd 1 10/1/18 8:48 AM

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