Argentina: Oversupply and falling exports: "Potatoes sell for a third of what they cost to produce"

By  Sandra Insaurralde

So far this year, potato producers have faced a complex situation. What began with encouraging expectations ended in a situation of oversupply, plummeting prices, and profitability that fell far short of production costs.  Potato production is concentrated in provinces such as Buenos Aires, Córdoba, Mendoza, Río Negro and Rosario (the closest to Entre Ríos), Jujuy, Salta, and Tucumán.

"The industry was unable to achieve the expected exports,"  agricultural engineer Sergio Costantino, producer and director of Argenpapa, told EL ARGENTINO . He explained that the weather was favorable and production increased, but the lack of a competitive dollar, overproduction, and lower logistics costs in other countries left Argentina out of international markets.

As a result, a significant portion of the potatoes intended for processing ended up in the fresh domestic market, creating a glut.  "Consumption has grown because potatoes are cheap, but unfortunately, it can’t double and keep up with the growth in supply," Costantino told EL ARGENTINO.

Entre Ríos is not among the main potato-producing provinces in terms of volume, but its contribution to the domestic market is constant thanks to short-cycle crops in areas such as Colón, Concordia, and Gualeguaychú. "It’s a domestic issue; there’s no commercial potato production nationwide," producer Costantino told EL ARGENTINO. This family potato production has a limited supply chain and is also dependent on domestic consumption levels, making it vulnerable. This adds to the other factors fueling the national crisis, which has resulted in, in many cases, a halt to production and a shift toward other types of vegetables or items.

Greengrocers in Gualeguaychú: more expensive or cheaper?

How does the potato sector crisis impact our city’s greengrocers? Potatoes are one of the staple products. Although wholesale prices have fallen due to oversupply, this decline isn’t always reflected in the retail sector. Logistics costs, intermediation, and the need to maintain margins mean consumer prices remain stable or even rise, generating tension with customers who perceive a contradiction between what is reported in the media and what they pay at the counter.

Currently, a bag of  black potatoes sells for between 2,000 and 4,000 pesos, while production costs are around $12,000 per hectare,  which, compared to average yields, raises the cost to $6,000-$7,000 per 20-kg bag. "Today, potatoes sell for a third of what they cost to produce," said Costantino.

EL ARGENTINO spoke with various businesses and grocery stores in our city, who perceive a reality that is not so different, but with its nuances.

On the one hand, Nicolás asserted that potatoes "aren’t that cheap" and shared his customers’ comments: "People ask why potatoes are still so expensive when they say they’re cheap in the countryside." The greengrocer from the downtown area explained: "We have to cover the freight costs, which includes fuel, which is very expensive, as well as other transportation costs, because with these roads in poor condition, our trucks break down more often. It’s not as simple as it seems."

In turn, Carlos , from a southern greengrocer, conducted an analysis of the products that were exported and now remain in Argentina: “We receive potatoes that used to go to the processing plant.  Sometimes they are wetter, softer, and we have to inspect them carefully. With potatoes that are very ugly and discarded, you’re already losing money, and we have to recoup that investment,” explained the merchant, who felt the impact of overproduction.

Product quality is also affected. Many potatoes originally destined for processing ended up in the fresh market, meaning some grocery stores receive merchandise with a shorter shelf life or in irregular conditions. This forces retailers to take extreme care in product rotation, assume the risk of loss, and dedicate more time to selection, which impacts the daily dynamics of the business.

From another part of the city of Gualeguaychú, Mónica, who has a vegetable stand located in her minimarket in the northwest area, described buying potatoes as a bit daunting: “We used to buy by the bag, now we go by the kilo. Because if it doesn’t sell quickly, it’s thrown away . Customers check the quality of the potatoes a lot; if they see an ugly or mushy potato, they won’t bring it to you and it ends up being a mess. Nobody sees that; our losses in this reality are greater than what’s left over from sales,” added the vegetable seller, who tries to work with fresh potatoes year-round.

Costantino explained that the drop in wholesale prices isn’t directly reflected in greengrocers.  "At the retail level, there are other factors that impact sales: high utility costs, electricity, gas, rent, employees, and freight ," he noted. He also highlighted the importance of intermediation, freight, and labor, which add costs beyond the price of potatoes. Therefore, the impact of the crisis isn’t as evident for consumers.

Popular and accessible consumption

Despite the challenges, potatoes remain one of the most affordable items in grocery stores.  “It’s one of the cheapest products on the market,” said Costantino, adding that “consumption per person has increased by 30 to 40 percent compared to the historical average of 40 to 50 kilos per year. While these are not official statistics, this trend stems from reports from retailers in different regions of the country,”  the producer concluded.

The potato sector crisis exposes a paradox that runs throughout the entire chain: while wholesale prices fall due to oversupply and the lack of exports, consumers don’t notice this drop in their wallets.  The high costs faced by retailers—services, rent, labor, and intermediation—dilute any potential benefits . Thus, potatoes remain one of the most accessible foods, but also one of the most invisible in their production process. Understanding this gap is key to valuing the work that sustains our daily food supply and to devising policies that strengthen the weakest links in the food chain.