China, India Are Now Competitors In Potato Sector

Tariffs can have short-term and long-term impacts on the agriculture industry.  The short-term may mean higher fertilizer prices, or fewer exports markets for a season or two.  The long-term impacts can change the make-up of the global market.  No where is that more true than in potatoes.  Chris Voigt, Executive Director of the Washington state Potato Commission said when tariffs went into affect against China during the first Trump Administration, it led to that market being no longer viable for American potato growers; for a couple of reasons.

“1.) When the tariffs went into effect years ago, we just started slowly losing business. And then 2.) China actually invested hugely into potato research, you know their goal was to double potato production, and they have accomplished that.  And so over the course of five years, by making huge investments into research. And so, we've actually kind of lost most of our business in China.”

Voigt added that China went from a roughly $120 million market, to now $10 million, and he expects that number to drop to near zero soon.  He added a similar situation has occurred in India, where they have grown and developed their potato market in less than a decade, taking market share, primarily lower tier markets, away from the U.S.

Potato Industry Hopeful About Japan, Others

Despite that discouraging news, Voigt is hopeful that the Administration will be successful in striking up bilateral trade deals with a host of other counties, such as Japan.

“We have a great relationship with Japan. They're our biggest market for our frozen potato products like French fries and tater tots and hash Browns. But we don't sell a lot of fresh potatoes into Japan," Voigt added.  "Now about eight years ago, we were able to get some fresh potatoes in Japan for processing. So, we can ship potatoes destined for potato chip plants in Japan. Just a handful of them. Not all of them across the country, but just a handful of them. So that's been getting our foot in the door. But we really feel like Japan is a great opportunity for not only Washington growers, but also Oregon and Idaho and other folks on the West Coast, if we can allow our fresh potatoes, for example, in each other restaurants and into their grocery stores.  So, this tariff war is actually bringing Japan to the table and giving us a little bit of leverage.”

Voigt said he and others in the industry are very optimistic about the possibility of increased market access in Japan, as well as other Asian markets such as Thailand, the Philippines and others.

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