Knowledge Exchange

Ag Economy

Vegetables

  • Spring/early summer started out dry, and some growers report that it was the earliest they have seen the need for irrigation. Some areas have seen reasonable rainfall, but others are struggling with irrigation, and/or drought conditions.
  • While the impact of COVID-19 was highly disruptive to national vegetable markets initially, much of the dumping and losses occurred in March and April, prior to the start of the Northeast growing season.
  • Growers primarily selling to grocery stores have seen strong sales, while those who previously sold mainly to restaurants or foodservice distributors have had to adjust their marketing.
  • For growers selling direct-to-consumer, the impact of COVID-19 has been variable. Demand from consumers for local produce has been strong, and some CSA farms reported their strongest year ever. However, operators of farm stands and farmer’s markets have had to make significant adjustments to deal with the virus, and sales have varied based on local restrictions on operations as well as the willingness of consumers in the area to come out and shop.
  • For some farms, finding workers, and keeping them healthy has posed significant challenges, especially for farms with worker housing.
  • The availability and cost of labor remains a significant challenge for the sector. Initial concerns about the availability of H-2A workers were largely resolved, but both minimum wage and the Adverse Effect Wage Rate for H-2A increased significantly in many Northeast states. Growers have had to closely monitor their labor costs and try to gain efficiencies in order to remain profitable.

Potatoes

  • 2019 crop marketing: The COVID-19 pandemic created uncertainty with potato markets during the April-June time period. Initially, fresh markets saw a surge in demand and price during what was already a strong marketing year, as more people bought fresh potatoes through supermarkets. Demand for potato chips also kept the chipstock market strong during the period. Frozen processing initially saw a decrease in demand due to the closure of restaurants during the stay at home orders. This caused many processors to allow growers to sell normally contracted production through other channels. Processors in Maine continued to pay contract price for production diverted to other markets, thereby making growers whole. As the economy has begun to re-open, it is now believed that growers/processors pushed too many contracted potatoes to other uses, thereby creating a continued tight balance between supply and demand. As supply to the tablestock markets increased early on, prices fell below pre-pandemic levels. Now that processors are pulling back contracted production from the tablestock markets, prices have rebounded significantly.
  • 2020 crop planting/condition: Due to expected cuts in frozen processing contract volumes and the uncertainty created by the pandemic as growers went into planting season, US growers reduced planted acreage by an estimated 47,300 acres. In Maine, it was originally thought that acreage could be down by 4,000-5,000 acres due to expected reductions in McCain contract volumes. This reduction averaged 15%, however, due to increases with other area processors, acreage only declined by 1,000 acres. Contract pricing also increased for the McCain contract for 2020, while most other contracts are flat to up slightly. The 2020 crop in Maine went into the ground in a timely manner, with most growers finishing planting by the end of May. The crop is growing rapidly with growing degree days running 15-25% above average so far during the growing season. Recent rains have alleviated some dry soil conditions.