Terrible pricing
Although the fields look good and North Carolina’s sweet potato crop looks healthy, there is a big cloud hanging over the heads of the state’s growers. “Pricing is just terrible,” Hocutt shared. “When it comes to export prices, this is the worst I have seen in six years,” she commented. Triple J Produce grows its own potatoes, but also markets sweets potatoes from outside growers. About 70 percent of the company’s product is exported to Europe and the remaining 30 percent stays in the domestic market.
Export prices below domestic levels
Prices have been declining in the past few years and where grower-shippers used to receive a premium for export product, export prices have now fallen below domestic levels. “The last I heard was a wholesaler in Europe who sold a 6kg. - box of USA grown sweet potatoes for 4,75 euros,” Hocutt said. “We started exporting six years ago and I saw prices starting to decline when we were about two years in, but over the last two years, the decline has been drastic. Back in May, sweet potatoes that were exported from Senegal and Honduras were selling at a higher price than USA grown sweet potatoes,” she added. Sweet potato growers are suffering and just in the first half of 2018, three US packing houses filed Chapter 11.
Europe needs the US
Some shippers lowered their prices artificially to gain market share. “Prices were lowered so much that it became a market reference and now, it is very hard to bring the prices back up unless all players in the industry collaborate,” Hocutt mentioned. “Europe relies on the US for sweet potato imports as there are only partial alternatives, including Israel, Senegal, Spain, Honduras and Egypt. The volumes out of these markets are not sufficient to cover the needs of the growing European market,” continued Hocutt.
As of right now, Triple J Produce is still exporting. “However, if prices don’t improve, we will be forced to cut off our export program and focus on the domestic market. If the export market does not cover cost price and continues to be lower than domestic, other players will follow and stop exporting,” Hocutt concluded.
