U.S. potato groups see opening of Mexico as great opportunity

May 23, 2014

by Rand Green

The U.S. Potato Board and the National Potato Council announced jointly that effective May 19, "the Mexican government has implemented its final rule to allow U.S. fresh potatoes to enter all of Mexico. This action is part of a bilateral agreement that facilitates trade in fresh potatoes between the two countries."

For nearly a decade, fresh potatoes from the United States have been permitted into Mexico only along a 26-kilometer zone along the U.S.-Mexico border. They are now permitted in all cities in Mexico with populations of 100,000 or greater.

"NPC and USPB support this bilateral agreement, as it will benefit potato growers in Mexico and the United States, as well as the processing industries and consumers in both countries," according to the joint release. "Per-capita potato consumption in Mexico is lower than in the United States, so there is room for this market to grow."

"After years of hard work by the U.S. potato industry, USDA and USTR, the full opening of the Mexican potato market to U.S.-grown spuds will create tremendous opportunities for all the major growing areas," John Keeling, executive vice president and chief executive officer of the National Potato Council, said in a written statement to The Produce News. "The U.S. potato industry is committed to educating Mexican consumers on the variety, quality and value that U.S. potatoes offer. There is a tremendous opportunity to grow demand for both domestic and imported potatoes in Mexico."

While some U.S. potato-producing states are better situated than others to participate in exporting potatoes into Mexico, due to geographic proximity other factors, "I think for the most part all growing regions see this as an opportunity," said David Fairbourn, manager of industrial communications and policy for the U.S. Potato Board. "Even if people aren't planning to export to Mexico, it is a good opportunity to market U.S. potatoes overall. I think most producers recognize that even if they aren't actively exporting, exports are good because it helps manage the supply in the U.S."

The USPB will be conducting market-development programs in Mexico designed to increase consumption of all potatoes in that country.

"We anticipate this market development work will also benefit domestic production in Mexico," said Fairbourn. The board's programs will "reach out to the Mexican consumers to help them increase their per-capita consumption of potatoes in general," whether grown in Mexico or the United States.

The board's marketing programs will focus strongly on consumers, helping them understand that potatoes are "a great vegetable, very nutritious," he said.

The bilateral agreement also gives Mexican-grown potatoes access to markets in the United States. Mexico grows primarily a single potato variety, a type of white potato. Since there are many people now residing in the United States who are familiar with that variety, "it makes sense that people who grew up with Mexican potatoes that now live in the U.S." should have access to them in their local supermarkets, said Fairbourn.

"We are absolutely thrilled" with the opening of the market in Mexico, said Frank Muir, president of the Idaho Potato Commission. "There are a lot of people that have been involved on both sides of the border to make this happen."

Some details still need to be worked out, "but we are very excited to be part of a very monumental period in history between the two countries," Muir said, adding that the agreement has significance beyond the potato industry.

Coming to an agreement "has been a real complicated issue to work out, and it involved the highest levels of government on both sides," Muir said. "If both parties follow the rules outlined, I think it will be beneficial for both countries."

IPC will be carrying out activities in Mexico to help increase per-capita consumption of potatoes, "which I think will have a positive impact not just on potatoes we are shipping there but also on potatoes they are growing there," Muir continued. "We will do things to educate consumers on how to use potatoes. I think we have some great opportunities to grow the overall business for Mexico," which will be good for growers on both sides of the border.

For the United States and for the state of Idaho, Mexico is "a potentially very significant market that we have to take care of in a very judicious way," he said.

Idaho has been shipping potatoes into the border zone in Mexico for almost a decade, "so we have a lot of experience," he said. "It is important that other states that have not been shipping there learn from states that have been doing it. We want to make sure that we are shipping very high quality."

Since Mexico grows basically just a single variety of potato, the new trade agreement will provide "the opportunity for Mexican consumers to get a lot of different varieties," including russets, reds, golds and fingerlings, said Seth Pemsler, vice president of retail and international for the IPC.

The expansion of the market in Mexico "has been a long time coming, and we thank the National Potato Council and the U.S. Potato Board for their many years of work to open up the market," Pemsler said.

Over time, Idaho will be "establishing our brand in Mexico like we have in other countries and like we have in the border zones," Pemsler said. "We are already known there. We have done research" that shows Mexican consumers know of Idaho potatoes, particularly the higher-end consumers, which are IPC's target market.

Pemsler said he expects Colorado, Washington and Idaho will ship the most potatoes to Mexico, but others will likely participate as well.

California has a limited volume and a narrow, early-season marketing window, but it will benefit from the new agreement because of its close proximity to the Mexican market.

In anticipation of the announcement that fresh U.S.-grown potatoes would be granted access to markets throughout Mexico, an event called the U.S.-Mexico Bilateral Potato Encounter was held in Mexico City May 6, with over 200 participants, including 48 U.S. grower-shipper representatives as well as representatives of Mexico's retail and wholesale sectors and such trade associations as USPB, NPC and IPC.

Presentations included such topics as the potato market in Mexico and opportunities for increased demand; the status of potato imports to Mexico and regulatory history; and import requirements for U.S. potatoes, according to Fairbourn.

The event gave Mexican importers and distributors and U.S. shippers an opportunity to network, Fairbourn said. It was "extremely valuable in establishing connections and creating mutually beneficial relationships."