Bigger Red River Valley crop clouded by truck worry

November 21, 2017 08:02 AM
 
Tight truck availability — a problem that may grow with mandates for electronic devices that log hours of service — is one of the few negatives for Red River Valley potato grower-shippers this year.

Tight truck availability — a problem that may grow with mandates for electronic devices that log hours of service — is one of the few negatives for Red River Valley potato grower-shippers this year.

The region has enjoyed a bounce-back year in terms of crop output and quality, said Ted Kreis, marketing director for the East Grand Forks, Minn.-based Northern Plains Potato Growers Association.

Wet conditions during the growing season and during harvest last year caused losses of about 30%, he said. This year, production is about 35% above a year ago but comparable with larger crops of the past.

Given overall U.S. red potato supplies, the region is in a good position, he said.

“We have more reds than we have had for a while, but Wisconsin, Idaho and Colorado all seem to be down,” he said. “The market can take our potatoes, it is just a matter of getting them in trucks and getting them there.”

Supplies of potatoes from the Red River Valley will likely continue through June, he said.

“Quality is very good this year and that is really helping out,’ he said.

According to the U.S. Department of Agriculture, market conditions for Red River Valley 50-pound cartons of round red size A No. 1 potatoes was $11 in mid-November, compared to $11-13 per carton in mid-November a year ago.

Kreis said most of the pressure on pricing is coming from freight rates.

“Receivers are absorbing some of the (higher freight) rates but a buyers’ job is to get it is as cheap as possible,” he said. “It’s a tight pull right now.”

Truck rate bump

Truck rates for the Red River Valley region in Minnesota and North Dakota for loads going to Chicago in mid-November was reported by the USDA at $2,087 per truckload, up 23% from about $1,700 a year ago. Rates to New York City from the region topped $5,000 in mid-November, well up from $3,880 per load the same time a year ago.

The truck shortage has caused shippers to scramble to bring trucks to the region, said Adam Weber, transportation coordinator at Black Gold Farms, Grand Forks, N.D.

“We are finding guys in the South, helping them find loads to get up here to take loads out of here,” Weber said,

Weber said trucks may remain tight perhaps through the New Year. The coming electronic logging device mandate on Dec. 18 could complicate truck availability further, he said.

Hurricanes in Florida and Texas helped contribute to tight truck conditions all across the nation earlier in the fall, said Paul Dolan, general manager of Associated Potato Growers Inc., Grand Forks. Demand for goods from storm-hit areas pulled available trucks to that region, he said. 

Associated Potato Growers is sending some shipments by rail to certain customers, though many receivers can’t handle the task of unloading large train cars, Dolan said. Dolan believes the electronic logging device mandate rule will have some effect on truck availability, though it is hard to speculate how much.

While deer season and turkey shipments from Minnesota are also cited as seasonal factors, he said the critical factor now for higher truck rates may be the shortage of drivers.

Both sellers and buyers might have to live with elevated truck rates for a while, he said.

Rising truck rates have been occurring throughout the country, said Mike Rerick, vice president of sales with Nokota Packers, Buxton, N.D.

“I think the customers see that and are understanding to a point,” he said. 
 

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