French fry processors will pay Idaho potato growers about 20% more this year, but farmers worry that may not be enough to offset the rising price of inputs such as fertilizer.

The Southern Idaho Potato Cooperative each year negotiates separately with processors Lamb Weston, McCain Foods and J.R. Simplot Co. on behalf of member growers. The effort impacts other players, such as dehydrators who also contract for potato acreage.

Ron Jones, the cooperative’s negotiator, said April 25 that it had certified agreements with Lamb and McCain. It has not certified an agreement with Simplot.

Contract details were not released. The number of acres grown is not part of the negotiations; processors make arrangements with individual growers for the volume to be contracted.

“The increased price for potatoes may not be enough to offset the increase in input costs,” Jones said. “In particular, fertilizer costs have increased dramatically.”

Labor, repair and other costs also rose, as did open-market prices for potatoes and processors’ internal costs. Last summer’s heatwave reduced yields and quality around the West.

The contract price for the 2021 crop decreased slightly from 2020 as the industry dealt with COVID-19 uncertainties. Input costs also rose between 2020 and 2021.

Jones said this year’s 20% increase in price per hundredweight of processing potatoes is “an approximation. Some growers with some varieties would be paid more, and others would see a lesser increase.”

For example, a processor may pay a higher percentage increase for a variety that is more difficult to grow or is produced in eastern Idaho, where a shorter growing season can reduce yield, he said.

Idaho grows about one-third of U.S. potatoes and is the country’s top producer. More than half the state’s 300,000-plus acres of potatoes are for processing. Washington ranks second in total acres, but 90% of its crop is for processing.

Jones said year-to-year contract price increases are similar in Idaho and Washington, where negotiations began last summer and concluded in October.

Dale Lathim, Potato Growers of Washington executive director, said that state’s price increase “set the bar for the rest of the groups in North America to target for their negotiations.”

“The 20% price increase sounds like it’s very large and it is, but grower costs are going up that much or more,” Lathim said. “This will keep some growers at par to where they have been economically, but many growers that don’t have a lot of buying power or have to lease their land will be definitely taking a hit on the profitability of their potato contracts.”

“This does not make everybody happy,” Jones said of the Idaho contract. “Growers in different locations have different costs.”

For example, many eastern Idaho growers use more fertilizer and less manure, but have lower rents, he said. Growers in the west may need to fumigate.

Lamb Weston in its last two quarterly earnings reports mentioned higher potato costs, resulting from the lower 2021 Northwest harvest, among challenges. Its April 7 report said the company had secured enough raw potatoes to meet near-term production needs.