Recent Price Developments in the United States Potato Industry

An analysis of the relationship between potato prices and potato production is important for understanding industry developments. The analysis of the effect of potato production on potato prices was presented in two AJPR articles: Pavlista and Feuz (American Journal of Potato Research 82:339–343, 2005) and Loy et al. (American Journal of Potato Research 85:438–444, 2011). The articles estimated inverse potato demand in the U.S. and Germany, respectively, during the period of 1980–2003. They hypothesized that the potato price response to changes in potato production may be affected by a shift in consumer demand towards increasing consumption of processed potatoes in the U.S. and by socio-economic changes in Germany. This paper extends the existing research by analyzing the recent price developments in the U.S. potato industry. The empirical results indicate that the potato price response to changes in potato production was different during the period of 2005–2010, as compared to the periods of 1993–2004 and 2011–2016, which coincided with the implementation of the potato acreage management program.