Potato Grower

WWW.POTATOGROWER.COM 37 BUSTING THROUGH BARRIERS Despite all of the hurdles, U.S. potato exports achieved record levels for both value and volume for the July 2018 to June 2019 marketing year (MY19). U.S. exports were hindered by retaliatory tariffs, uncertainty in U.S. trade policy, a strong U.S. dollar, high freight costs and tight U.S. potato supplies. However, international demand remained very strong, and potato supplies in the main competitors of the European Union and Canada were down. The value of total U.S. exports increased 1 percent to $1.8 billion, driven by a 1 percent increase in exports of frozen potato products, which make up 65 percent of the total, and a 3 percent increase in dehydrated potato exports. The value of fresh potato exports, which includes table-stock and chip-stock, was off less than 1 percent, and potato chip exports were down 1 percent. The volume of total exports grew 2 percent— in this case, led by a 6 percent increase in fresh potato exports and a 3 percent increase in dehydrated exports. When the fresh weight equivalents for the processed products are applied, the total amount of potatoes exported out of the U.S. is 73 million hundredweight. The 20 percent retaliatory tariff placed on imports of U.S. frozen fries by Mexico resulted in a 25 percent decline in the volume exported, a total of lost sales of 37,172 metric tons valued at $33 million. The 10 percent retaliatory tariff on U.S. frozen imports to China resulted in an 8 percent decline; however, this tariff is still in place and is slated to increase with the next round of tariffs. During the marketing year, the U.S. dollar strengthened 3 percent compared to the euro and 6 percent to the Korean won. Total world potato imports increased once again, up 4.5 percent in 2018, reflecting strong international demand. Canada surpassed Japan as the top U.S. export destination on a volume basis because of the 14 percent increase in fresh exports to Canada. The majority of these fresh exports were potatoes from Idaho to be processed into frozen fries in Prince Edward Island. Mexico remained the third-largest market but declined 13 percent because of the trade wars, while Korea moved into a strong fourth, up 14 percent. The Philippines entered the top five for the first time, up 11percent. Looking forward, demand for U.S. potatoes remains extremely strong in the international markets; however, several obstacles remain. A big concern is the upcoming elimination of tariffs in Japan and Vietnam on frozen and dehydrated products from our competitors in Canada and the EU. Another concern is that it appears the EU crop will rebound from the 23 percent decline in 2018, though supplies will remain tight at least through the remainder of 2019. U.S. processors have added capacity, but the U.S. crop is forecast to be down 3 percent for 2019. It is important to note that over the past 10 years, frozen production in the Netherlands and Belgium has increased by 68 percent, while U.S. frozen production has only increased 10 percent over the same period. To help combat this increased competition and try to overcome some of the barriers, Potatoes USA continues to invest additional marketing funds into international markets. Potatoes USA received $5.1 million in Agricultural Trade Promotion funding in addition to the $4.98 million in Market Access Program funding from the USDA. These funds will be used to bolster programs in existing target markets as well as to expand into the new markets of Saudi Arabia, UAE, Cambodia and Indonesia. Potatoes USA By John Toaspern, Chief Marketing Officer To help combat increased competition and try to overcome some of the barriers, Potatoes USA continues to invest additional marketing funds into international markets. Record exports despite barriers to trade Idaho Irrigation Equipment Show & Conference Class schedules at www.idahoirrigationequipmentassociation.org Thursday, January 16, 2020 8:00 am - 4:30 pm Best Western Burley Inn & Convention Center 800 N. Overland Ave. Burley, Idaho 2363-15IdahoIrrigEquipAssn16v.indd 1 10/1/19 8:54 AM

• Cover