AN ECONOMIC ASSESSMENT OF SWEET POTATOES Executive Summary U.S. growers harvested 11.1 million cwt of sweetpotatoes from 80,000 acres in 1993. North Carolina and Louisiana, the top two sweetpotato producing states, accounted for 57 percent of the 1993 output. California, Texas, Alabama, and Mississippi ranked third through fifth in production. U.S. sweetpotato production has been decreasing since 1970. During 1989-93, production averaged 11.6 million cwt--7 percent below the average for 1970-74. Higher yields since the 1940's have partly offset a decline in acreage. While harvested area has declined by half since the mid-1960's, average yield has risen 48 percent, due to higher yield varieties and expanded irrigation use. According to the 1987 Census of Agriculture, most farms growing sweetpotatoes were small operations, with 57 percent having total crops sales of less than $25,000. Only 19 percent of U.S. farms growing sweetpotatoes reported crop sales of $100,000 or more. Although we do not have statistics on enterprise diversification on farms growing sweetpotatoes, industry contacts indicate that sweetpotatoes are usually grown as part of a vegetable and field crop enterprise mix. In North Carolina, the largest sweetpotato state, several of the largest sweetpotato growers are primarily tobacco producers. In Louisiana, sweetpotato farms also frequently produce cotton, soybeans, and rice. About 60 to 65 percent of sweetpotatoes sold for human consumption are to the fresh market; 35 to 40 percent are destined to the processed market. Canned sweetpotato products account for the largest share of the processed market. Following World War II, per capita use of sweetpotatoes began a slow downward trend which lasted through the early 1980's. Since then, per capita use has stabilized at about 4 pounds, fresh weight. The marketing season price pattern for sweetpotatoes is stable compared with prices of highly perishable vegetables, such as lettuce and celery. Prices for the new marketing year, beginning September 1, become established during September and October when production prospects become clearer. They remain relatively flat or rise slowly through May or June. Prices sometimes rise sharply during July and August as storage stocks become depleted. Growers in some areas try to harvest a portion of their crop early to benefit from the high prices in July and August. Sweetpotatoes are a tropical and subtropical crop that grows best in sandy or well-drained loamy soils. They thrive on high daytime temperatures for top growth. Root formation is best when the soil temperature is above 65o F at the time of transplanting. Small, immature plants tolerate mildly cool temperatures, but their vigor is reduced if exposed to low temperatures early in the season. Freezing at the time of harvest may damage the leaves but will not usually harm the roots, unless soil temperatures drop below 55o F. Sweetpotato plants are grown from slips (transplants) that are produced from vegetative seed stock or from cuttings taken from field-planted slips. Most growers purchase vegetative seed in sufficient quantity to produce their own transplant material. Sweetpotatoes are planted at 10-12 inches between plants, and 40- 44 inches between rows. Sweetpotatoes are typically planted in late spring and harvested in late summer and early fall. Growers usually plant sweetpotatoes over a period of weeks to spread labor and equipment use. The time between planting and harvest ranges from 70-150 days, depending on the variety, soil type, moisture, and temperature conditions. A 3-5 year rotation is recommended for sweetpotatoes in order to alleviate problems of insects and diseases, particularly soil-borne diseases, and nematode attacks. Sweetpotatoes are generally harvested by hand after the roots have been exposed by disk diggers, plows, or bed diggers. Although it results in more damage to the roots than hand harvesting, mechanical harvesting is becoming more widely adopted because of labor-cost savings. Harvesting and marketing costs typically amount to 40-60 percent of total production costs. The weather-related peril most likely to result in indemnity payments under a sweetpotato crop insurance policy is excessive rainfall. Excessive soil moisture causes "souring" or asphyxiation of the roots and can result in complete crop losses. Drought, frost, and extended cold temperatures are also perils. Soil-borne diseases usually cause greater economic losses than foliar and stem diseases. Insects problems can generally be controlled. Ad hoc disaster data can be used to indicate which sweetpotato- producing areas received large payments relative to their acreage. NASS does not collect data on Arkansas sweetpotato acreage, but that state received 4.2 percent of ad hoc sweetpotato payments over the 1988-93 period. Similarly, North Carolina accounted for 40 percent of U.S. sweetpotato acreage between 1988 and 1993, and received nearly 47 percent of the payments made for that crop. In contrast, California and Louisiana collected smaller shares of ad hoc payments relative to their acreage. These data suggest that, under a potential sweetpotato policy, the probability of yield losses for sweetpotatoes in the North Carolina area may be somewhat greater than in California and Louisiana. Insurance issues addressed in this report include the setting of reference prices, estimating "appraised production," moral hazard, and the demand for insurance. Our research suggests that the demand for a sweetpotato policy would likely be higher in the southern and eastern states than in California.