Potato Price Pressure

Take a look at this recent article on potato (raw) pricing: http://www.foodproductiondaily.com/Publications/Food-Beverage-Nutrition/FoodNavigatorUSA/Financial-Industry/Low-returns-threaten-potato-supplies/?c=%2BlZ8zGql8mqEpTywG1J1sQ%3D%3D

Seems like this represents more than a short-term blip: potato prices are going to go up, they must go up. What with the Midwest flooding and the trend to increase corn production due to the ethanol craze, supplies are down; with grower costs going up, many will change to other crops. No way but these trends will push prices up.

Question is: how will this affect the industry? How will processors, their suppliers and customers respond?

One result that is obvious: processing efficiency, productivity, yield (or whatever else you want to call it), will become more important than ever before. basically, how do you produce more product with less raw? This involves elimination of waste in areas we have not thoroughly addressed before.

How will we reduce material loss via the peeler? Peeling must happen, of course, but exactly how deep steam peeling goes is a significant driver of yield/recovery. How do we minimize it?

How do we reduce the cube stream volume in the cutter deck area? Produce fewer white cuts, for sure. But also produce fewer short pieces by making smarter cutting decisions with ADRs. Pass a few more minors if, by cutting them out, we create more short pieces. Especially when retaining them in the pass stream will not take us out of grade.

How do we reduce product breakage that creates more short pieces that ultimately get removed?

Lots of people are looking at these and other issues now, and I expect they will do so increasingly going forward. You can find some ideas in my posts below. But make no mistake the health and success of our industry depends on our finding real improvements in yield.

Tim

Stumble It!

Bookmark on del.icio.us