Business Markets & Pricing Canadian Fry Processors to Struggle for Supply

Canadian Fry Processors to Struggle for Supply

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After expanding french fry production in Canada, drought conditions and contract reductions at planting time, processors in Canada will struggle to find supply despite an estimated 0.4 per cent increase in potato production nationally, the Aug. 12 issue of North American Potato Market News (NAPM) says.

NAPM expects Canada to produce 106.9 million cwt of potatoes this year, up 0.4 per cent from 2019. There were 16,800 more acres planted this year which will help compensative for reduced yields due to the dry conditions in Eastern Canada.

“We expect Canada’s national average potato yield to drop to 298.2 cwt per acre, from 311.5 cwt for the 2019 crop. The forecast yield would be the lowest that the country has recorded since 2013,” the report says.

NAPM’s production forecast is based on if Eastern Canada receives normal growing conditions throughout the month of August. This is a critical time for the crop and without relief from the current conditions, yields could be much lower, the report notes.

Parts of Prince Edward Island are experiencing worse conditions than they endured during 2001, when the island’s potato yield fell 35 per cent below average. A similar drop this year would reduce P.E.I. production by six million cwt, relative to NAPM’s current forecast, the report says. Other provinces dealing with drought conditions include New Brunswick and Quebec.

Fresh potato supplies are currently tight across the country. Most of Canada’s table potatoes are grown in the eastern provinces, where drought conditions are the worst. Growers in Ontario and Quebec both planted more table potatoes, but that won’t be sufficient to offset the expected losses in the Maritime provinces, the repot notes.

With drought conditions in the Maritimes and new production capacity in Manitoba and Alberta, coupled with contract reductions at planting time due to the pandemic, french fry processing plants nationally will not be able to run at capacity.

“In recent years processors have moved potatoes from Alberta, Idaho, and the Columbia Basin to eastern processing plants to cover raw product shortages. We may not see that repeated this year. The fryers may choose to make up for any shortage in eastern product by increasing plant run-time in other areas. That will depend on how much COVID-19 suppresses overall demand for finished products.”

For chip production, Ontario and Quebec will produce enough chip potatoes to carry plants through May, the report notes. However, chip potato production in P.E.I and New Brunswick could fall short of industry usage requirements. There are also reports that Alberta chip potato growers have experienced disappointing early yields.