Profitability in Potatoes Pt 1
I’m Bob Larson. Inflation is high and ag producers are feeling it, thanks, in large part, to the myriad of challenges brought on by the pandemic.
At the Potato Expo in Anaheim, University of Idaho Assistant Professor and Extension Specialist, Pat Hatzenbuehler talked about how potato growers are feeling it especially with the rising cost of inputs …
HATZENBUEHLER … “With the labor issues the way they are maybe that’s going to be higher costs, not into next year but at least for fertilizer just skyrocketing over the past few months. Fuel as well is another big input for the potato industry that does a lot of trucking and also capital-intensive production. So, that’s just one of the main takeaways is to expect higher costs.”
But, Hatzenbuehler says costs aren’t everything …
HATZENBUEHLER … “The second takeaway message that we had is that cost is just one element of the profit equation, and the revenue is the other side. So, the good news is that prices are also increasing and so there’s opportunity to maintain the margin even with increasing costs due to the nature of demand for potatoes.”
So, Hatzenbuehler says you don’t have to lose …
HATZENBUEHLER … “If you’re able to pass costs up through into prices, then that may not mean lower profits in the context of increasing costs.”
Tune in tomorrow for more on profitability in agriculture with soaring input costs making it more challenging.
