# Potatoes: Cycles Why one hot summer can send potato prices soaring Source page: https://www.materialinsights.org/commodities/potatoes/cycles/ What this tab covers Price history and what drives booms and busts, including this commodity's super-cycles, the drivers behind them and the metrics to track. It charts monthly prices (World Bank) with a switch to inflation-adjusted annual prices; where there is no World Bank series it uses USGS US prices. Potato markets are notoriously volatile. Demand is inelastic, and planted area responds to last year's price, producing boom-bust swings like the hog cycle. Weather sets yields: a hot, dry summer in northwest Europe can send open-market prices soaring, while a good season leaves growers selling below cost. Tilton and Guzmán note that farm prices are driven mainly by supply shocks, not the business cycle (pdf p. 114). Contracted volumes cushion processors, so spot prices bear the brunt. No public benchmark price series for this commodity in the datasets used. Many minor materials trade on private contracts. #### Super-cycles in potatoes Potatoes have no world super-cycle. The crop is bulky and perishable, so only a small share is traded and prices are set locally. They swing hard with each harvest and with storage decisions. World output has grown slowly, from 266.8 Mt in 1990 to 390.4 Mt in 2024 (FAOSTAT), as rising yields offset a shrinking area (19.9 Mha in 2000 to 17.1 Mha in 2024). Output has shifted from Europe to China and India: India's crop grew almost fourfold over the same period, from 14.8 Mt to 57.1 Mt. Futures markets have a chequered history, from the 1976 Maine potato default to the low-volume European contracts of today. 1. 1840s Late blight destroyed the Irish potato crop, causing famine and the repeal of the Corn Laws (Morgan). no price series in the sources used 2. 1976-1979 Maine potato futures on the New York Mercantile Exchange suffered the largest default in futures history at the time (May 1976) and a delivery scandal, and were later ended (Blas and Farchy; Yergin). no price series in the sources used 3. 2000-2024 Asian expansion: India's harvested area rose from 1.34 Mha to 2.32 Mha and its yield from 18.6 to 24.6 t/ha (FAOSTAT). no world price series exists; output rather than price is the measure here #### What drives the cycle - **Weather and disease.** Late blight, frost and heat waves cut yields within weeks. - **Storage decisions.** How much farmers and traders hold back in cold stores sets prices for the rest of the year in India. - **Processing contracts.** Fry and chip makers lock in area and prices ahead of planting, stabilising part of the market. - **Seed availability.** Shortage of certified seed limits area and yield the following season. #### Metrics to track | Metric | Why it matters | Where to track it | |---|---|---| | **World and country output, area and yield** | Annual supply trend | FAOSTAT | | **North-west Europe potato area and crop estimates** | Supply for the main fry-exporting region | North-western European Potato Growers (NEPG) | | **US potato stocks** | Storage holdings that drive US prices | USDA NASS Potato Stocks report | | **Indian mandi potato prices (Agra, Kolkata, Delhi Azadpur)** | Daily price signal for India | Agmarknet (Ministry of Agriculture) | | **India horticulture production estimates** | Official crop size | Ministry of Agriculture and Farmers Welfare, horticulture estimates | | **EEX potato futures** | Market expectation of European processing potato prices | European Energy Exchange | ## Other sections - [Summary](https://www.materialinsights.org/commodities/potatoes/index.md) - [Overview](https://www.materialinsights.org/commodities/potatoes/overview/index.md) - [Correlation](https://www.materialinsights.org/commodities/potatoes/correlation/index.md) - [Extraction](https://www.materialinsights.org/commodities/potatoes/extraction/index.md) - [Production](https://www.materialinsights.org/commodities/potatoes/production/index.md) - [Stocks](https://www.materialinsights.org/commodities/potatoes/stocks/index.md) - [Trading](https://www.materialinsights.org/commodities/potatoes/trading/index.md) - [Movement](https://www.materialinsights.org/commodities/potatoes/movement/index.md) - [Criticality](https://www.materialinsights.org/commodities/potatoes/criticality/index.md) - [Characteristics](https://www.materialinsights.org/commodities/potatoes/characteristics/index.md) - [Emissions](https://www.materialinsights.org/commodities/potatoes/emissions/index.md) - [Relationships](https://www.materialinsights.org/commodities/potatoes/links/index.md)