Canada’s potato storage holdings as of June 1 were down 14.4 per cent — or just over 2.8 million hundredweight — from the year before, according to figures from the United Potato Growers of Canada (UPGC).
Kevin MacIsaac, UPGC general manager, says it’s the result of good demand in the fresh, chip and french fry categories in recent months.
“The market has been active,” he says. “It has helped move the pile down substantially compared to where the pile was a year ago. Quality has been good as well, and that always help move product.”
The low Canadian dollar has meant continued strong demand for processing potatoes south of the border, and exports to the U.S. have been up this year. Domestic consumption of processed potato products has also risen in recent months, MacIsaac says, largely due to the marketing efforts of quick service restaurants. He points to the move by McDonald’s to offer all-day breakfasts in the U.S. and Canada, which has led to a surge in its sales of hash browns in both countries.
MacIsaac says the supply situation paints a promising picture for table potatoes, which have already seen good prices for much of the winter and spring. “Barring something else in the industry happening, price is likely on the move up,” he says.
MacIsaac anticipates continued strong demand for fresh into the summer months. A wet spring in many parts of both countries caused significant delays in planting and has hampered the crop in some areas, which will likely delay the appearance of early potatoes on the market.
“We’re not going to have a big volume of new crop coming on early,” MacIsaac says. “This will even put some more pressure on the available product that’s left.”
It’s a different supply picture for seed potatoes, as storage holdings at the beginning of June were up substantially from the year before. MacIsaac says because of planting delays in many areas, the UPGC suspects it could be case of numerous seed potato lots having been sold but not moving out of the warehouse by June 1.
WHILE THE overall number of potatoes in storage is down in Canada, it’s a much different picture in the United States. Figures released by the U.S. Department of Agriculture (USDA) in June indicated storage holdings were up eight per cent from the same time the previous year.
USDA figures show that as of June 1, the 13 major potato states held 55.5 million hundredweight of potatoes in storage, exceeding the June 1, 2016 inventory by 4.2 million hundredweight.
ANNUAL FROZEN potato product production capacity in North America is expected to rise by at least 620 million kilograms between 2014 and 2020, according to Bruce Huffaker of the North American Potato Market News. That’s an increase of 9.6 per cent over six years.
This projected growth follows an extended period of relatively stable capacity and raw product usage, notes Huffaker, adding that frozen potato product industry in North America is expanding in the hopes of capturing more export business with overseas markets.
MacIsaac says the Canadian potato industry is welcoming this expansion in the processing sector after an extended period of relatively stagnant growth.
“Announcements have been made in terms of increasing capacity in the last year or so, and we haven’t seen that a lot over the previous five years,” he says. “There was a point in time when plant owners would say maybe we’re going to move capacity out of Canada, but now that’s totally changed. It’s mostly due to our currency level but also the quality of potatoes grown in Canada has improved tremendously.”