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ARS Home » Midwest Area » Madison, Wisconsin » Vegetable Crops Research » Research » Publications at this Location » Publication #331093
Title: Grower price effects of Innate™ potato

Author
item MITCHELL, PAUL - University Of Wisconsin
item DONG, FENGXIA - University Of Wisconsin
item Bethke, Paul

Submitted to: Common Tater
Publication Type: Trade Journal
Publication Acceptance Date: 7/15/2016
Publication Date: 8/1/2016
Citation: Mitchell, P.D., Dong, F., Bethke, P.C. 2016. Grower price effects of Innate™ potato. Common Tater. 68(8):48-53.

Interpretive Summary:

Technical Abstract: The revival of biotechnology applications for potato raises interesting economic questions that we examine here. Technologies of this sort increase supply by decreasing waste and reducing percentage of off-grade product. Increased supply leads, eventually, to reductions in the market price, so that farmers must rush to adopt the newest yield-enhancing technologies to maintain profits and stay ahead of falling prices. Here we use company press releases on the supply impacts of biotech potatoes to estimate impacts on aggregate potato prices and farmer income. First we summarize the conceptual model of the US potato market and how new technologies such as Innate™ affect supply and possibly demand. Next, we summarize the supply impacts of Innate™ Generations 1 and 2 and derive the market-level impacts on supply. Finally, we combine the model and these impacts to estimate the effect on grower prices and income over a range of reasonable assumptions. In brief, we find that Generations 1 and 2 of Innate™ potato are unlikely to have a large price effect; we estimate at most a 30 to 40 cents per hundredweight decrease in the long-term potato price. The big uncertainty is the consumer response. These estimates assume no change in consumer demand, but less than a 1% increase in consumer demand due to Innate™ would be more than enough to offset this price decrease.