Prices for french fries have jumped as tight spud supplies and pandemic restrictions being eased have driven up demand, the May 27 issue of North American Potato Market News (NAPM) says.
“As countries are beginning to open up, businesses are the panic buyers. Companies, rather than individuals, are frantically purchasing the materials and supplies needed to operate and survive the surging demand for nearly everything as the world recovers from the pandemic,” the report says.
Prices for potatoes and potato products have remained below year earlier levels during most of the pandemic, but price inflation could be on the way, the report notes. French fry buyers are reporting at least one processor has increased prices by the most they can remember.
“Fryers appear to be raising their prices in an attempt to recapture margins that they enjoyed prior to the pandemic, and to manage through extremely low finished-product inventories,” NAPM says.
Food prices are increasing all around, the United Nations Food and Agriculture Organization Food Price Index is seeing it’s longest price rise in more than a decade. The index was up 30.8 per cent compared to a year ago in April — it has increase for 11 months in a row now.
Freezer stocks of fries have also fallen, they are down 6.4 per cent compared to a year ago as of April 30, NAPM says. As of April 30 there’s a 31 day supply of frozen potato products in freezers — marking the smallest inventory, relative to usage, on record for this time of year.
Fryers may have to look at early contract settlements with growers to secure the needed acreage for the 2022 crop, the report notes. However, strong commodity prices for other crops may increase competition for spud ground.
