04/28/05 Do spud farmers recover operating costs?

University of Idaho ag economist Chris McIntosh says Idaho producers have a 95 percent chance of recovering their operating costs for all of their potatoes, but less than 75 percent for open-market spuds. Nevertheless they keep on planting and harvesting, hoping for a good return that will rebuild their equity. MCINTOSH "When I presented this at the potato conference nobody's told me these numbers were ridiculous. They've all seemed to go 'well that about describes my situation.' But it is a starting point. It's a starting point for understanding what's going on in the market and how we can move toward a better more successful world for those involved in the production of Idaho's most famous crop." McIntosh based his research on "Monte Carlo" analysis. First, he used U of I cost-and-returns estimates to ascertain a cost of $1,038 per acre to grow potatoes on a 1,500-acre eastern Idaho farm that produces 500 acres of spuds in a three-year grain-grain-potato rotation. Then, he examined monthly average potato prices for 1990 through September 2004. Finally, he ran 10,000 computer simulations to see how often the price growers received would have covered their operating or total expenses. Today's Idaho Ag News Bill Scott