BusinessMarkets & PricingPost Pandemic Potato Demand Bounce Back

Post Pandemic Potato Demand Bounce Back

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Potatoes are in hot demand as society returns to normal with the pandemic end near.

With potato crops sprouting across Canada and contracts settled, attention is turning to the post pandemic future. Across North America, COVID-19 restrictions are easing as vaccination rates increase, meaning more people are sitting at restaurants eating french fries again and, in some places, even watching pro sports in person.

“We expect demand to increase above pre pandemic levels. I mean, we’re close to that now,” Kevin MacIsaac, general manager of the United Potato Growers of Canada (UPGC), explains in a phone interview. “It’s just a matter of how long it will take to get to that level and the rollout period — the demand is definitely there for those products.”

Processing contract volumes and prices have increased across Canada, MacIsaac says. In Manitoba, where J.R. Simplot Company recently completed the expansion of its Portage la Prairie plant, production has been ramped up. Although it’s expected Manitoba growers won’t be able to fulfill all of the plant’s needs and potatoes will have to be shipped in from out of province.

Final acreage numbers won’t be released until mid-July by Statistics Canada, but many are expecting the Canadian potato crop to be larger this year. UPGC is predicting acres will increase by at least 2.3 per cent, while the North American Potato Market News is calling for a 4.3 per cent increase.

At the Crop Transition Conference, held in-person and virtually in Fargo, N.D. on June 14, there were concerns raised processors didn’t fully explain future demand needs during contract negotiations.

“As soon as the negotiations got done with, the contracts were settled, all the sudden it was like a race to see who could raise the prices faster,” Dale Lathim, executive director of the Potato Growers of Washington, Inc., said during a presentation at the conference. “It’s a combination, but (demand) is definitely picking up every month, more and more and more returning to normal.”

Adding fuel to the fire, stocks of potatoes from the 2020 crop are running low. As of June 1, Canadian potato stocks were 20.7 per cent below the three-year average at 14.9 million hundred weight (cwt), data from Agriculture and Agri-Food Canada showed. Fresh potatoes were down 3.6 per cent from the three-year average at 2.2 million cwt left in storage and processing down 23.9 per cent at 12.3 million cwt.

“I think we’ll be able to supply most of the market demands. I’ve seen other years where it comes down to if supply is short, then the producers basically will put their — let’s say their least frequent customers on a bit of a ration basis or a bit of a limited supply basis — and their long-term customers they will look after those,” MacIssac says.

There’s also worry about how the potato crop will fair this growing season. Western Canada and even into southern Ontario and Quebec, have faced dry growing conditions to start off the year with some potatoes suffering from early season frost damage. Water supplies for irrigation are also tight across Western Canada. However, timely rains in late May have helped the crops look better. Out in the Maritimes, growing conditions are looking good despite last year’s drought.

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