2015 Costs Estimates of Producing Fresh and Processing Potatoes in Washington

2015 Costs Estimates of Producing Fresh and Processing Potatoes in Washington

Suzette Galinato, Research Associate, IMPACT Center, School of Economic Sciences, Washington State University, Pullman, WA, Peter Tozer, Assistant Research Professor, IMPACT Center, School of Economic Sciences, Washington State University, Pullman, WA
If you’re thinking of producing potatoes in Washington State, this publication can be a very valuable resource. Designed to provide information on the variable and fixed costs of potato production for fresh or processed markets as well as ranges of price and yield, this publication helps evaluate the feasibility and profitability of producing potatoes in Washington.
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The results presented in this WSU publication serve as a general guide for evaluating the feasibility of producing potatoes in the Columbia Basin as of 2015, with a capital and machinery endowment suited to a 1,000-acre potato enterprise. This publication is not intended to be a definitive guide to production practices, but is helpful in estimating the physical and financial requirements of comparable plantings. Specific budget assumptions were adopted for this study, but these assumptions may not fit every situation since production costs and returns vary across farm operations, depending on the following factors:

  • Capital, labor, and natural resources
  • Crop yield
  • Cultural practices
  • Input prices
  • Prices of potatoes
  • Management skills
  • Size of the operation
  • Type and size of machinery and irrigation system

Costs can also be calculated differently depending on the intended use of the budget. To avoid unwarranted conclusions for any particular farm, readers must closely examine the assumptions made in this study, and then adjust the costs, returns, or both as appropriate for their operation.

Potato Production in Washington

Washington is the second largest producer of potatoes in the United States. In 2014, Washington growers harvested 160,000 acres of potatoes, representing 15.7% of total U.S. acres and 22.7% of total production. Potatoes are grown in Adams, Benton, Franklin, Grant, Kittitas, Lincoln, Skagit, Walla Walla, Whatcom, and Yakima counties (USDA NASS 2009). Potato production acreage has increased over the past decade, from 154,000 acres in 2005 to 165,000 acres in 2014. Planted acreage increased by 3% between 2013 and 2014 (USDA NASS 2015).

As of 2014, the majority of potato acres in Washington (69.5%) are planted to processing varieties such as Russet Burbank, Umatilla Russet, and Russet Ranger. Fresh potato production comprises 13.5% of total planted acres and is primarily planted to the Russet Norkotah variety. Other varieties for fresh or processing make up the remaining 17% (for example, 5% chipping potatoes, 12% other).

Study Objectives

This study provides information on (1) the variable and fixed costs required to produce potatoes, for the fresh or processed markets, under center pivot irrigation, and (2) the ranges of price and yield levels at which potato production would be a profitable enterprise. An Excel workbook has also been developed, which allows the user to estimate production costs and examine the impact of different input assumptions, yields, and price scenarios.

Information Sources

The data used in this production cost budget were obtained from a group of Washington potato growers. These growers represented both fresh and processing potato production in the Columbia Basin. Their production practices and requirements for labor and capital are the basis for the assumptions used in this study and represent a consensus of current production methods.

Due to the method used to generate this potato production budget, the values reported in this budget represent what growers can anticipate as their average cost of production over several years, assuming no major crop loss. However, crop loss should be considered as part of a risk management plan and we recommend that growers use the Excel Workbook provided to evaluate their own production costs and returns.

For a more detailed budget template, see Cost of Producing Processing and Fresh Potatoes Under Center Pivot Irrigation in the Columbia Basin, Washington (Hinman et al. 2006).

Budget Assumptions

The following assumptions were made in developing the potato enterprise data:

  1. The enterprise budgets reported are for potatoes grown under center pivot irrigation and in a crop rotation following alfalfa.
  2. The varieties used in this budget are Russet Burbank potatoes that are planted for the processing market, and Russet Norkotah potatoes that are planted for the fresh market.
  3. The rental rate of irrigated crop land is assumed to be $800 per acre. This rental agreement assumes the landowner furnishes the center pivot irrigation system and the grower pays the water and power charge. The rental rate also includes property taxes and insurance.



Copyright 2016 Washington State University

Published June, 2016

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