Potatoes Price Analysis - December 2025

Summary

Key Findings:

• Potato prices in December 2025 dropped to $0.847 per pound, representing a 16.5% decline over 3 months and 10.7% decline year-over-year
• Despite a 2.2% reduction in U.S. production to 412.06 million cwt, oversupply conditions persist
• Market dynamics continue to limit grower returns with oversupply evident and some excess diverted to cattle feed
• Fresh potato prices in November-December 2025 were below $11 per hundredweight

The potato market is experiencing a paradox: despite reduced production, prices remain depressed due to oversupply conditions and weak demand dynamics.

Recent Price Trends

December 2025 Performance

The latest BLS data shows potato prices at $0.847 per pound in December 2025, marking significant declines across multiple timeframes:

• 3-month change: -16.5% (-$0.167)
• 6-month change: -13.7% (-$0.134)
• 12-month change: -10.7% (-$0.102)

Historical Context

Comparing to recent years:

• December 2024: $0.949 per pound
• December 2023: $0.961 per pound
• December 2022: $0.948 per pound

The current price represents a 10.7% decline from December 2024, continuing a downward trend that began in late 2025.

Production and Supply Factors

2025 Crop Overview

USDA estimates the 2025 U.S. potato crop at 412.06 million cwt, down 2.2% from 2024, with regional variations:

• Idaho: Production up 2.3%
• Washington: Production down 10.4%
• North Dakota: 24.5 million hundredweight, down from 25.3 million in 2024

Yield Performance

The 2025 U.S. average yield forecast is the highest on record (461 cwt per acre), which has helped offset reduced acreage. Idaho's harvest wrapped up under near-perfect conditions with above-trend yields and strong quality.

Storage and Quality Issues

Strong quality has required additional storage, with some growers choosing not to finish harvesting once storage was full to avoid additional costs for potatoes without market outlets.

Market Dynamics and External Factors

Oversupply Conditions

Despite production decreases, the market faces significant oversupply:

• Oversupply is evident, and some excess will be diverted to cattle feed
• Processors are taking overages at $2.00–$2.50 per cwt, better than cattle feed but still below breakeven
• Returns remain low at $3–$4 per cwt but are better than expected

Processing Market

The processing potato market is less volatile than fresh markets due to pre-planted contracts, though industry reports indicate reduced contracted acreage and lower contract prices for 2025-2026.

Weather Impact

The spring 2025 Florida crop was set back due to freezing temperatures in January, affecting regional supply dynamics.

Input Cost Pressures

Fertilizer Costs

Nitrogen prices decreased 3-7% from previous year, while Potassium/Potash increased 1-2% and Phosphate pricing down 13% year-over-year. With fertilizer accounting for approximately 20% of input costs, growers face difficulty agreeing to contract pricing.

Tariff Uncertainty

The potential for tariffs creates uncertainty as many fertilizer components used in the U.S. are generated in Canada, Russia or China. Potential tariffs could raise fertilizer prices, creating challenges for growers finalizing 2025 contracts.

Global Context

International Markets

The global potato sector shows sharp regional contrasts, with European markets suffering from oversupply and weak demand. Italian potato prices have fallen to €0.25–€0.30 per kilogram due to excess European supply.

Processing Expansion

2025 delivered credible forward motion with new processing capacity moving from talk to ground-breaking across multiple regions.

Key Factors Affecting Prices

Supply-Side Factors

• Exceptional yields despite reduced acreage
• Storage capacity constraints limiting harvest completion
• Regional production shifts (Idaho up, Washington down)

Demand-Side Factors

• Weak open market demand despite reduced supplies
• Processing contract reductions for 2025-2026
• Export market pressures from global oversupply

External Pressures

• Input cost volatility from potential tariff policies
• Weather disruptions in key growing regions
• Storage and logistics costs exceeding market returns

Outlook and Implications

Generally, open market potato prices continue below cost of production, even with 5% production reduction from 2024. Frozen contract prices are also expected to be down in 2025.

The market faces a challenging environment where unlike most years when production decreases lead to improved prices, this year open market prices have generally been below year-earlier levels.

Critical Watch Points for 2026:

• Contract negotiations for processing potatoes
• Acreage decisions by growers facing below-cost returns
• Resolution of trade and tariff uncertainties
• Storage capacity and quality management through winter months

The potato market's current dynamics suggest continued pressure on grower profitability despite production constraints, highlighting the complex interplay between supply, demand, and external economic factors affecting agricultural commodities.