Business Markets & Pricing Potato Acreage Cut May Cause French Fry Shortage

Potato Acreage Cut May Cause French Fry Shortage

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Reductions to processing contract volumes in North America due to the pandemic demand drop may cause a french fry shortage, the Aug. 5 issue of North American Potato Market News (NAPM) says.

Domestic demand for french fries rebounded faster than processors expected and NAPM estimates American potato production is down 18.3 million cwt at 404.6 million cwt this year. The largest processing volume cuts happened in the Columbia Basin and North Dakota.

“We believe that (processors) will need to compete with table potato interests for the available raw product,” the report says.

Supplies from the 2019 table potato crop would have been tight if it wasn’t for the overflow of processing potatoes during the pandemic. This means the market needed more table potatoes than were grown in 2019.

“We believe that fryers will need to buy open Russet potatoes from the 2020 crop. The extent of those purchases could be the major price driver for the 2020 Russet table potato crop.”

Chip supplies on the other hand should be fine despite contract volume reductions for early potatoes. “Plants are finding enough raw product to meet their needs, but we are not seeing any evidence that supplies are backing up as they often do at this time of the year,” the report notes.

The pandemic is slowing exports of United States potatoes and potato products. June exports were down 28.8 per cent compared to 2019, this included a 43.6 per cent drop in frozen product exports. While frozen exports fell, imports rose 10.4 per cent, with the extra product coming in from Europe.