Storage Crops
Research Chapters
Introduction     |     Synthesis     |     Lender Analysis
​Overview
Storage crops represent some of the Pacific Northwest’s most economically important commodities: in Washington State alone, the potato industry accounts for $4.6 billion in state income, as well as providing 23,500 jobs. Global storage crop exports are significant: in 2009, for example, the U.S. exported approximately 3 billion pounds of frozen french fries (fresh weight estimate) valued at $635 million.
This analysis targets the three most economically important storage crops in the Pacific Northwest: potatoes, onions, and carrots. We researched organic production of these three crops to explore the viability of an alternative, differentiated storage crop sector.

Supply Drivers
  • with their conventional counterparts on production costs, though there are significant differences in yields across space and time for both production systems.
  • Technology/mechanization – Mechanization of storage crop production has given rise to land consolidation for both organic and conventional production systems. Lack of machinery appropriate to the smaller scale of many diversified organic farms may be a factor in this process.
  • Crop rotation – Crop rotation is arguably the most important step in successful, high-yield production of storage crops, particularly for organic farmers. Of the three most profitable crops (potatoes, carrots, onions), each have distinct rotation times: onions are generally grown in 3-4 year rotations; carrot rotation should be at least 1 year; and potato rotation can be as high as 4-7 years.

Demand Drivers
  • Environmental values. Consumer demand research indicates that eaters are willing to pay premiums to purchase organic foods, though data specific to storage crops is scarce. Consumer preferences for organic are driven in part by concern for the environment.
  • Health. “Avoiding toxins” has been cited as a primary motivation for consumers to purchase organic, particularly with storage crops because of their unique susceptibility to absorbing harmful chemicals in the soil. Differentiated varieties, such as multi-colored potatoes and carrots, have additional health benefits associated with their colors that attract organic consumers.
  • Marketing and branding / packaging. Given that 87% of consumers nationally regard the availability of locally grown foods as “Very Important” or “Somewhat Important”, marketing and branding campaigns for local storage crops, with a focus on differentiated and/or organic products, may prove a boost to local production.
  • The rise of processed foods. Since 1940, demand for processed food products has steadily increased, especially within the potato industry; this trend has affected the trajectory of organic production and marketing. As of 2012, an estimated 87% of Washington’s total potato crop was sold to processors. Demand for processed products extends to other storage crops including carrots and onions.

Opportunities
There is reason for optimism about the trajectory of grass-finished beef in the Pacific Northwest, given that the overall market trend is upwards. Consumers have revealed willingness to pay price premiums for grass-finished and locally raised beef. And there are key success stories in the development of niche markets and supply chains for Pacific Northwest grass-finished beef. Thus, we believe that despite the challenges, there may exist opportunities for profitable investment in grass-finished beef, provided that the investor pays attention to the following issues:
  • If the investor is seeking to support an individual grass-finishing operation, look for one that can claim a reliably high (> 1.75 lbs.) average daily weight gain (ADG) on pasture.
  • Seek opportunities to establish or strengthen alternative supply chain structures, including supporting the development of aggregation firms that can build relationships between regional producers, processors, and retailers, and deliver a year-round supply of beef to consumers.
  • Seek opportunities to foster partnerships between crop farmers and cattle ranchers. As crop farmers seek to expand their methods of building healthy soils, there may be potential for synergies in rotating cattle grazing and crop production.

For more detail on the economics of storage crop production in the Pacific Northwest download Production Analysis: Storage Crops from the sidebar.

Downloadable Files

Below are combined and individual files related to storage crop production and infrastructure opportunities in WA and OR. To stay informed about next steps from this research please share appropriate information below. 

Combined File

  Combined WA/OR Research: Storage Crops  (5.8MB)

Individual Files

  Investor Brief: Storage Crops  (217KB)
Production Analysis: Storage Crops  (2MB)
Infrastructure Analysis: Storage Crops  (281KB)