There are preliminary indications grower numbers will shrink this year—despite decent potato prices—because of low interest rates and the reluctance of banks to “gamble again”.
Industry observers say the number of growers that could be lost in Idaho alone will be some where in the 10-15 percent range—120-150.
“They’ve paid off their notes—in many cases in the range of $500,000 to $600,000—but the banks won’t go with them again,” one allied industry observer said.
The banks are taking the conservative approach, “We’ve got our money back, interest rates are low, why should we gamble on growers again?” he said.
Growers are getting anywhere from $10-$11/cwt for their potatoes but it will probably not be enough to allow them to pay off their loans, replace equipment, and finance their own crops.
“This has been a three- to four-year deal with the bankers. Can you blame them?” an observed asked.
While production loans and some government loan programs will probably still be available, the private banking sector does not appear willing to risk losing money on low market prices in almost all U.S. agricultural commodities.
Despite the loss of growers, it is common knowledge that when a grower quits, there are others standing by to pick up his ground. So acreage will probably not be affected.