Marketing Maine Tablestock Potatoes

The Marketing Services Division of USDA’s Agricultural Marketing Service (AMS) was asked by USDA’s Agricultural Research Service (ARS) National Program Leader and ARS’s New England Soil and Water Research Laboratory personnel to help with existing efforts to assist Maine fresh potato farmers in their search for alternative marketing strategies, and reverse the recent decline in the profitability of their operations. ARS researchers previously had conducted an exhaustive study defining possible crop rotations for potatoes to maintain soil fertility, reduce pest infestation, and preserve crop yields. In the course of the investigation, they determined that Maine producers needed help in marketing their products and turned to AMS for expertise in marketing and distribution practices. As a result, AMS’s Marketing Services Division initiated a study to evaluate the Maine potato industry and identify changes in business planning, product aggregation and handling, grower organization, distribution practices, and marketing activities that might help Maine’s fresh potato growers. In order to more fully understand the Maine potato marketing situation, AMS and ARS staff interviewed people involved in the potato industry. In January 2007, they contacted Maine Potato Board members and staff and scheduled a meeting with the board. Also at that time, AMS and ARS staff met with the Maine Commissioner of Agriculture and the USDA State Farm Service Agency (FSA) Director who helped them understand the financial situation of Maine tablestock potato producers. Beginning in June 2007, AMS researchers arranged on-site meetings with wholesalers and market news reporters in Jessup, MD, and Boston, MA, and with several potato farm operators in northern Maine. This was followed in 2008 by interviews and conference calls with chain store buyers in Virginia and Washington, DC; Cooperative Extension educators in Maine; potato brokers; AMS Market News staff in Benton Harbor, MI, and Boston; and USDA Federal inspectors. To better learn how Maine’s fresh potato producers could best penetrate the markets for “sustainable,” “local,” and “eco-labeled” foods, they met with the management and staffs of Red Tomato, Whole Foods Market, and Appalachian Sustainable Development, retailers on the forefront of developing direct supply chains for locally grown food. To understand the different potato products marketed to consumers, AMS researchers conducted informal surveys of retail merchandising practices for Maine-origin and other potatoes at chain store outlets. AMS researchers also undertook several supplemental analyses to identify Maine’s relative competitiveness with other sources of supply in major market locations. Prices of Maine fresh potatoes were compared with those of potatoes from other production areas from AMS Market News data. The costs of rail, truck, and water transportation for Maine and other fresh potatoes to major market locations were also examined using waybill data, to understand the transportation burden faced by Maine’s fresh potato producers. The cost of energy and Maine’s position in the competitive world of electricity, fuel, and natural gas supply and rates were compared with other producing areas to highlight the challenges Maine faces. The report also examines how fresh potato growers, repackers, and marketers in other parts of the country use cooperative marketing and supply control mechanisms, category management, and branding/promotional programs to enhance marketing efficiency and performance, and how channel diversification into processed market items, such as dehydrated products, starch, and plastics can help support fresh potato growers by creating alternative outlets for grade 2 and cull potatoes.