The Cost of Growing Potatoes
Potatoes are a staple crop with broad demand, but their economics differ depending on whether they are sold fresh, for storage, or as specialty varieties. Small growers often do better by focusing on new potatoes, colorful varieties, or local branding instead of competing directly with large commodity producers. They can be useful in a diversified farm plan because they store better than many fresh vegetables.
Startup costs
Startup costs usually include seed potatoes, ground preparation, fertility inputs, and irrigation. Hilling equipment or labor is a major consideration, especially if the farm is scaling beyond hand production. Storage space with good airflow can add cost if the crop will be held for later sales. Harvest tools, bins, and curing space also affect the initial setup.
Ongoing costs
Recurring costs include labor for cutting seed if used, planting, hilling, weed control, irrigation, harvest, and sorting. Fertility and soil health inputs matter because potatoes are fairly demanding and quality suffers in poor conditions. Storage losses and repeated handling can also become ongoing costs if the crop is marketed over time.
Yield & how it sells
Potatoes can yield well per area, with total output often much higher by weight than many fresh market vegetables. They are usually sold by the pound, in small retail bags, or as bulk fresh market stock, with new potatoes often carrying better direct market value. Storage potatoes can spread income over a longer season, but the added holding costs need to be covered by the later sale price.
What makes it profitable
Profitability is usually moderate rather than exceptional for small farms unless the grower has a strong niche or direct market premium. Potatoes can still be attractive because they produce a lot of food per area, store relatively well, and help smooth cash flow when marketed after harvest season. Margins improve when harvest and handling are efficient and when the crop is sold as specialty, early, or locally branded product. Competing on price alone against large farms is usually difficult.
Financial risks
Key financial risks include rot, uneven stands, insect pressure, weather related quality issues, and storage shrink. Harvest damage can reduce marketability, and low market prices can make a heavy crop less valuable than expected. Wet conditions can also increase disease losses and slow digging.
Tips to improve returns
Focus on varieties and sale windows that large suppliers do not serve well, such as fresh dug new potatoes or colorful specialty types. Good curing, storage management, and grading can protect value after harvest. Use local Cooperative Extension and your Small Business Development Center for region specific yield and storage budgets.
General planning information, not financial or investment advice, and not a guarantee of profit. For real budgets, work with your Cooperative Extension office and local Small Business Development Center. Page updated Aug 4, 2026.