North American processing and freezer inventory data is showing record large french fry sales for the months of April and May, the June 24 issue of the North American Potato Market News (NAPM) says.
As of May 31, 1.127 billion lbs of french fries and other frozen products were in freezers — marking a 2.6 per cent increase from the previous year. NAPM notes at the current usage rate this equals to a 31.1 day supply, making for the smallest May 31 inventory on record (relative to usage).
“If the minimum inventory is a 30 day supply, this year’s holdings would give the industry a cushion of about 37 million lbs going into the crop transition. That is significantly smaller than the five-year average June 30 cushion, which has been 162 million lbs,” the report says.
Processors usually increase frozen stock in June. NAPM expects raw product supplies will be sufficient to meet fryers needs until new crop arrives. However, strong french fry demand and finished product price increases could see the industry use up the usual June frozen stocks buildup.
Overall, April and May sales of frozen products have outpaced last year’s usage rate by 13 per cent, the report notes. Processors used 33.19 million cwt of potatoes for purposes other than dehydration during April and May, jumping 30.1 per cent above the 2020 pace.
“In our analysis we assume that finished product weight equates to 58 per cent of processing potatoes used for purposes other than dehydration,” NAPM says. “Based on our assumptions, the industry sold roughly 1.946 billion lbs of U.S. product during April and May. That is the largest April-May sales volume on record.”