Fresh and Processed Potatoes
Potatoes are the leading vegetable crop in the United States
(not including sweet potatoes), contributing about 15 percent of
farm sales receipts for vegetables. Over 50 percent of potato sales
are to processors for french fries, chips, dehydrated potatoes, and
other potato products; the remainder goes to the fresh market.
Although potatoes are grown year round, the fall crop comprises
roughly 90 percent of potato production.
Potatoes are a tuberous crop grown from the perennial plant
Solanum tuberosum. Potato tubers are specialized stems of the
potato plant that form just under the soil surface. Potato plants
sprout from cut portions of whole potatoes (usually certified seed
potatoes) commonly referred to as seed pieces or potato seed. The
crop grows in various climates and soil types, is storable, and
provides consumers with a relatively inexpensive source of
calories. Potatoes are the fourth-most-consumed food crop in the
world, after rice, wheat, and corn.
The potato originates from the Lake Titicaca region of the
Andean Mountains, located near modern-day Peru and Bolivia. It was
domesticated between 10,000 and 7,000 years ago, providing a stable
high-altitude food source for many cultures. The Incan people
(13th-16th century A.D.) regarded the potato as key to their food
security since the crop could easily be stored in dehydrated,
freeze-dried, and fresh form for consumption during times when
other crops failed. Between 1532 and 1572, Incans introduced the
potato to Spanish explorers.
Reaching Europe around 1570, potatoes were first considered a
novelty shared between royal courts, but quickly became popular
with sailors as a cheap and nutritious food source that prevented
scurvy, a common ailment caused by vitamin C deficiency. In the
late 1700s, when much of Europe was engulfed in crop failures and
famine, the potato was accepted as a stable, high-calorie food
source that could be grown in a variety of climates, producing high
yields for feeding both livestock and people. Ireland became
particularly dependent on the crop by the mid-1800s. After three
consecutive crop failures between 1845-1848 because of late blight
infections (a fungal disease), more than 1.5 million people died
from starvation or emigrated from Ireland.
Many Irish immigrants fleeing the Irish potato famine immigrated
to the United States, bringing the potato with them. However, the
potato was already an American crop; documentation of its
cultivation dates back to early colonists. The importance of
potatoes in U.S. agriculture has been documented since 1866 when
USDA first included them in crop production statistics. Today, the
United States ranks fourth in the world for potato production,
behind China, Russia, and India.
Historically, Maine, New York, and Pennsylvania were the main
potato-producing regions. As settlement expanded west in the late
19th century, the invention of adequate irrigation systems and the
development of refrigerated rail transport spurred States like
Idaho, Washington, and Colorado to take the lead in U.S. potato
Western States produce almost two-thirds of fall potatoes, with
Idaho and Washington accounting for over half of the U.S. total.
Between 1866 and the early 1920s, production increased with
expanding acreage, which reached a peak of 3.9 million planted
acres in 1922. Acreage slowly declined thereafter, to around 1.0
million acres today, yet production continued to rise as yields
trended upward. By the 1940s, yields had increased because of
advancements such as:
- Introduction of improved varieties such as the Russet Burbank
potato, which was first bred in the 1920s by Luther Burbank and
known for its large uniform size and complementary sugar content
needed for french fry production;
- Increased use of chemical inputs such as fertilizers and
- Use of irrigation systems;
- Innovations in transportation infrastructures, particularly the
introduction of refrigerated rail cars and trucks; and
- Shift in production from Eastern to Western States, which have
higher concentrations of nutrient-rich volcanic soils optimal for
Over the past decade, the potato industry has significantly
consolidated growing operations. The Census of Agriculture reported
15,014 farms that produced potatoes in 2007, down from 51,500 farms
reported in 1974. Because of large capital investments in equipment
and storage facilities, farmers have sought to maximize production
through larger operations.
Roughly 90 percent of U.S. potatoes are planted in the spring
and harvested in the fall. The marketing season for fall potatoes
begins in August (for areas of early harvest) and may continue
through the following August. Unlike most produce crops, which are
perishable, potatoes are well-suited for long-term storage in
climate-controlled rooms or containers.
Because of their physical characteristics and storage
advantages, many major fall-season potato varieties can be sold in
fresh or processing markets throughout September-August marketing
year. Potatoes for fresh use are sold mostly on the open market
(rather than sold under production contracts negotiated prior to
the growing season), so prices are subject to market conditions.
Shippers' ability to store potatoes allows them greater flexibility
when marketing potatoes on the open market.
Processing potatoes that are used for making french fries are
typically contracted to commercial fryers before planting time. The
contracts specify the potato variety, volume, and price based on
previously negotiated quality requirements. Grower contracts with
processors are negotiated and signed before spring plantings,
enabling growers to procure and plant exact amounts of processing
Potatoes harvested in the winter, spring, and summer account for
less than 10 percent of U.S. potato production. However, these
potatoes meet specific market needs and generally fetch higher
prices than fall potatoes. For example, some consumers like "new"
or "freshly dug" potatoes, such as round red, white, yellow, and
purple varieties that are smaller in size and are normally not
stored before sale. Specialty varieties, such as the round white,
are also in demand for their chipping qualities. Moreover, winter,
spring, and summer potatoes help fill any supply gaps that may
arise because of shortages of the preceding fall crop in the fresh
market or for processing use.
Sales per acre are normally highest for the winter crop and
lowest for fall potatoes, but vary widely among producing States.
Prices for fresh potatoes are usually higher than prices for
processing potatoes because of crop-quality standards. Domestic
potato prices may vary not only in response to changes in weather,
yield, or demand, but also changes in supply from imported potatoes
and potato products. If a large quantity of frozen french fries
enters the country, U.S. potato processors may cut back on
contracts for processing potatoes, which would then be diverted to
the fresh market. Fresh-market prices would likely fall as a
Fresh and Processed
Potatoes are usually grouped into two categories:
Within the processing category, there are four general
- frozen (mostly french fries)
Historically, fresh potatoes were the primary form of potato
consumption in the United States. But because of the increased
popularity of french fries and other processed potato products
since the 1950s, use of fresh potatoes has decreased from a high of
81 pounds per person in 1960 to an average of 42 pounds per person
in the 2000s. Prices for fresh potatoes are usually higher than
those for contract-based processing potatoes. Because farmers can
sell fresh potatoes on the open market, they can store harvests
until prices are favorable for sale. Since 2000, the average price
for fresh potatoes has ranged from a low of $7.34 per hundredweight
(cwt) for the 2003 crop to a high of $14.44 for the 2008 crop.
Since 1970, use of processed potatoes has surpassed fresh use in
the United States. Spurred by the innovation of frozen-french-fry
processing techniques in the 1950s and the increasing popularity of
fast food chains, processed potatoes composed 64 percent of total
U.S. potato use during the 2000s (compared to 35 percent in 1960s).
During the 2000s, U.S. per capita use of frozen potatoes has
averaged 55 pounds per year, compared to 42 pounds for fresh
potatoes, 17 pounds for potato chips, and 14 pounds for dehydrated
Since 2005, the U.S. potato industry has enjoyed a trade surplus
in potatoes and potato products. Net export value (U.S. exports
minus imports) of potatoes and potato products in 2009 totaled $180
million. Japan, Canada, and Mexico are the top three export
markets; together, they account for about two-thirds of total U.S.
potato exports. Most exports consist of processed potatoes, such as
frozen french fries, potato chips, and dehydrated potato products
(e.g., potato flakes, granules, and flour).
Frozen french fries are the top U.S. potato product export,
accounting for more than half of total potato export volume. In
2009, exports of frozen french fries totaled 3.0 billion pounds
(fresh-weight-equivalent basis), valued at $635 million. Although
2009's volume and value were down from 2008, french fry exports
trended upward over the decade.
Potato chips and dehydrated potato products are also important
export products. From 2005 to 2009, chip exports averaged 543
million pounds (fresh-weight equivalent) with an average value of
$178 million. During this same period, exports of dehydrated potato
products (flakes, granules, flour, meal, and dried potatoes)
averaged 966 million pounds (fresh-weight equivalent) with an
average value of $82 million.
Few fresh potatoes are exported from the United States, partly
because of restrictive phytosanitary import regulations imposed by
some foreign countries. Given close proximity to U.S. growing
regions, Canada is the leading importer of U.S. fresh tablestock
and seed potatoes. Mexico, the second-leading foreign market,
imports limited amounts of both fresh and seed potatoes. Most fresh
potatoes exported to Mexico are reportedly used for processing.
Over the past 5 years, Canadian imports of fresh and seed potatoes
averaged $79 million, while Mexico's imports averaged $24 million.
Exports to Canada are expected to remain about the same, while
Mexico has limited potential because of restrictive phytosanitary
regulations regarding U.S. fresh and seed potatoes.
Between 2005 and 2009, the United States imported an average of
$886 million in potatoes and potato products. Canada is the largest
supplier, followed distantly by Mexico, the Netherlands, and
Germany. Canada's exports to the United States consist mostly of
frozen french fries and other frozen potato products. Mexico mainly
supplies chips and prepared/preserved (canned) products, while the
bulk of imports from Germany and the Netherlands are starches and
other dehydrated products.