Low Prices and High Yields Make Livelihood Difficult for Colorado Potato Farmers
Bennet Urges USDA Purchase of Potatoes to Remove Surplus Products from Market, Provide Immediate Relief to Colorado Farmers
Michael Bennet, U.S. Senator for Colorado, today announced his push to provide immediate relief for Colorado potato farmers struggling in the face of low commodity prices and a growing surplus of their product. Colorado is one of the top five potato-producing states in the country.
In a letter to Rayne Pegg, Administrator of the Agricultural Marketing Service, Bennet urged the agency to use its existing authority under the USDA's bonus commodities program to remove surplus products from the market and, in doing so, help avoid significant losses for growers in Colorado and across the country.
"Given the high risk and per-acre costs of potato production, losses of these magnitudes will severely impact our potato grower's ability to obtain financing at a time when credit is already very difficult to obtain," wrote Bennet, a member of the Senate Agriculture Committee.
In recent years, potato growers have taken a number of steps to reduce their production to meet expected demand for their product, but good growing conditions have resulted in record a yield, at a time when prices are low and new markets for fresh potatoes are limited.
Recently, the USDA has helped struggling farmers by using the bonus commodities program to help stabilize commodity prices in agricultural markets. For example, the USDA announced last month that it would make available $33 million worth of apples, tart cherries and dried plums to schools and other programs as part of the program.
The full text of Bennet's letter to Administrator Pegg is included below:
Ms. Rayne Pegg
Agricultural Marketing Service
14th & Independence Avenue, SW
Room 3071 South Building
Washington, DC 20250
Dear Administrator Pegg:
I am writing to request that you give favorable consideration to a pending request for purchase of fresh potatoes under your authority to remove surplus products under the Section 32 program. Despite the active steps the U.S. potato industry has taken to avoid an oversupply of potatoes, including limiting 2009 planted acres to 2008 levels, the fresh potato industry is in a state of surplus. This surplus is particularly acute in Colorado where the 2009 crop year yield is 6.1 percent higher than the average crop yield between 2004-2008, at a time when prices are low and new market opportunities for fresh potatoes are limited.
Without action the combination of low prices and surplus supply will cause significant losses for growers in Colorado and across the country. Given the high risk and per acre costs of potato production, losses of these magnitudes will severely impact the potato industry's ability to obtain financing at a time when credit is already very difficult to obtain.
Given the documented oversupply of fresh potatoes, I am confident that potato growers in Colorado and around the country have a strong case for Section 32 relief. We urge you to give this request prompt attention and fair consideration. Please keep me apprised of your decision.
Michael F. Bennet
United States Senator