Export markets have been a boon for industry growth in the past five years.
New York, NY (PRWEB) March 27, 2014
The Potato Farming industry produces potatoes, sweet potatoes and yams for sale to fresh markets and food processors. Potatoes are the most widely produced vegetable in the United States and form a well-accepted component of a number of prepared dishes and snack foods including french fries and potato chips. Sweet potatoes have increased in popularity in recent years, though still represent about 10.0% of the industry's sales. Due to the wide acceptance of the industry's products and constant demand from downstream markets, industry revenue has grown fairly steadily in the past five years. Over the five years to 2014, revenue for the Potato Farming industry has grown an annualized 1.6% to $4.6 billion.
According to IBISWorld Industry Analyst Antal Neville, “Agricultural production significantly relies on outside forces, and as such is not as exact as industrial production.” As a result, the industry is in a constant balancing act with downstream markets, trying to keep their output at levels that will give them a desirable sales price. But this is not a surefire strategy; consequently, a large harvest in 2012 led to an oversupply, causing prices to drop. Prices have since readjusted, but wary farmers reduced their planted acres, leading to a drop in production; as a result, revenue is expected to fall 5.5% in 2014.
“Export markets, both of fresh potatoes and downstream processed potato-based foods, have been a boon for industry growth in the past five years,” says Neville. Export sales have grown an annualized 7.1% in the past five years. Growth in emerging economies in particular represents an opportunity for revenue growth, especially as the US government negotiates free trade agreements like the Trans-Pacific Partnership, currently under discussion among 12 Pacific Rim nations. Increasing exports and growth in the popularity of organic and specialty potato varieties within the domestic market are expected to lead the industry to grow.
Market share concentration in the Potato Farming industry is low; no one company accounts for more than 5.0% of market share. However, large producers in this industry hold a considerably larger market share than large producers in other agricultural industries. Producers such as R.D. and Offutt, Wada Farms and Black Gold Farms are all franchise-run, which is an unusual circumstance for a crop production industry, as most crop producers across all agricultural industries are owner-operator family farms. Aside from a handful of large multilocation operations in this industry, most farmers in this industry are also family-run operators.
For more information, visit IBISWorld’s Potato Farming in the US industry report page.
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IBISWorld industry Report Key Topics
The Potato Farming industry grows potatoes, sweet potatoes and yams. Potatoes are a staple food product in many parts of the world and can also be used to in the manufacture of other products, including processed snack foods, alcoholic spirits and animal feed.
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