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Strong demand and decreased supply expected to strengthen sweet potato prices

Recent weather events that have decreased sweet potato inventories combined with strong demand on the domestic and export markets should bolster prices for sweet potato growers this year, according to industry members.

"Increasing fresh-market demand, increasing demand in the French fry category, increasing exports and increasing sales to the U.S. Department of Agriculture are affecting the current status of the sweet potato market," said Charles Walker, executive secretary of the U.S. Sweet Potato Council, headquartered in Columbia, SC. c walker headshotCharles Walker"These factors, combined with decreasing 'marketable' inventories of the 2012 crop, some recent weather events and a substantial decrease in 2013 acreage and production, have U.S. sweet potato growers looking for stronger prices."

Walker noted that fresh-market shipments of sweet potatoes for the four states that have the highest production -- California, Louisiana, Mississippi and North Carolina -- have increased by 18.5 percent in the last four years alone. Additionally, he said more foodservice operations are serving sweet potatoes -- particularly fries --today.

"In North Carolina alone, shipments to fry processing plants have quadrupled in just four years (2009 through 2012) from 25 million to 100.2 million pounds," said Walker. "The U.S. is number one country in the world in sweet potato exports, and exports continue to be a very bright light for sweet potato growers."

Sweet potato exports have increased every year since 2000. From 2000 to 2012, they increased by 538 percent, to 111,688 metric tons from 17,493 metric tons.

"Sweet potato exporters expect this upward trend to continue in 2013," added Walker. "In addition to strong exports to Canada, the Netherlands and the U.K. are becoming major players in receiving exports, and their share of sweet potato exports continues to increase.

"Also, the recent formation of the American Sweet Potato Marketing Institute should stimulate increased growth in sweet potato exports," he added.

ASPMI was designed to take advantage of USDA Market Access Program funds. The funds come from the USDA's Commodity Credit Corp. to aid in the creation, expansion and maintenance of foreign market for U.S. agricultural products.

Walker said it's a "broad-based industry group dedicated to the development, growth and maintenance of the exports' market for U.S. sweet potatoes."

Sweet potato sales to the USDA are also expected to increase this year, especially canned and bulk fresh shipments that are used for further processing. Sales of bulk fresh shipments increased by 155 percent in fiscal 2013.

Walker also pointed out that food authorities, such as nutritionists, have become more aware of the nutritional benefits of sweet potatoes. Efforts to improve nutrition in schools are recognized in the new Dietary Guidelines.

These guidelines recommend that a new category of vegetables -- a red/orange category -- be served in USDA's National School Lunch Program. This creates an unprecedented opportunity for sweet potato growers as the new School Lunch Meal Patterns now call for serving three-quarters of a cup of red/orange vegetables to students in grades K-8, and 1.25 cups for students in grades 9-12.

"Current inventories of the 2012 crop are down compared to the 2011 crop as the 2012 crop was smaller," said Walker. "Additionally, marketable sweet potato inventories of the 2012 crop will be further diminished due to defects of 'stem rot' and 'tip rot.' These defects are a problem in Mississippi, and to a lesser extent, in Arkansas. Defects of this kind are a result of the heavy rains that occurred during the 2012 harvest season.

"Moreover, due to cooler weather during this year's planting season, some growing areas were late in getting their plants in the ground," Walker continued. "It is likely, therefore, that the new crop will be late coming in. With lower inventories of the 2012 crop, and with the new 2013 crop coming in late, potential for an extended period of heavy new crop-old crop overlap will be diminished."

He also said that sweet potato-producing states along the East Coast have experienced unprecedented heavy and persistent rains.

Walker said that one North Carolina grower told him, "North Carolina, South Carolina, Virginia and New Jersey have been hit with Biblical rains in June and July." But he said it is too early to know just what affect this will have on 2013 production.

Sweet potato acreage and production will be down substantially in 2013, based on recently released forecasts by the National Agricultural Statistics Service.

"In 2012, NASS reported actual acreage of 130,500, while its late June forecast for 2013 is 116,100 acres -- a decrease of 11 percent," said Walker. "If this number holds, 2013 acreage will be the lowest since 2009, when the Industry harvested 96,900 acres. It should also be noted that the top four producing states produce 90 percent of U.S. sweet potatoes. Combined, they account for 11,500 acres of this year's decrease in acreage."

Walker further noted that Ken Thornhill, president of the U.S. Sweet Potato Council, who is based in Wisner, LA, believes that Louisiana acreage will be below 7,000 acres this year. For Louisiana, that's 500 acres below the 7,500 acres forecast by NASS.

"If we apply last year's U. S. average yield per acre of 209 hundredweight to the 2013 forecasted U.S. acreage of 116,100, U.S. production in 2013 will decrease by about 220 million pounds," he said.