Posts Tagged “transportation shortage”
By Ted Kreis – NPPGA Communications
Truck shortage cause shippers lost sales.
Marketers in the Red River Valley held the base price for #1 size A reds at or above $15 per hundredweight (cwt.) from September through February but a chain of events this spring sent the market on a big decline with some loads being sold as low as $8.00 per cwt. in mid-April. That is a 14-year low.
- 1. Big Crop – The Red River Valley had a big red potato crop, perhaps the largest since the 1970’s. Shippers knew it would be a challenge, but there was hope it may turn out okay like another big crop year, 2015-16. But one key event happened that year that baled the Red River Valley out; a crop disaster in Florida. That didn’t happen this year. With both regions having a large red crop, the late winter market became very competitive.
2. Transportation Shortage – There is a well-documented shortage of truck drivers in the U.S. for various reason. Areas outside busy shipping lanes, like us here in the Red River Valley, have been hit particulary hard. Finding trucks to move loads out of the valley has been exasperated by this year’s big crop.
3. Lost Business – Because of the inability to get trucks earlier in the season, ads with large retailers had to be turned down because shippers could not promise on-time deliveries. Multi-load sales opportunities for Thanksgiving and Christmas ads were lost. This likely led to the loss of return business for the remainder of the season. Retailers began running fewer red potato ads; statistics from AMS’s National Retail Report confirm this. A year ago, grocery retailers ran 96,201 red potato ads nationwide from October through February. This year they ran only 68,019, a 29 percent decline, or the loss of over 28,000 promotions!
The Northern Plains of North Dakota and Minnesota is the 3rd largest potato growing region in the country. Over 250 growers produce over 40 million hundredweight of potatoes a year. The region is the home of famous Red River Valley Red Potatoes, three french fry plants, two potato chip plants, several refrigerated product producers, and over 60 certified seed growers.