BusinessMarkets & PricingPotato Processing Slowdown Just Beginning

Potato Processing Slowdown Just Beginning

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The February-March processing use slowdown is just the beginning, as social distancing and other restrictions on work, travel and dining out caused a sharp decline in North American french fry demand, both for domestic use and export, the April 8 issue of North American Potato Market News says.

As the pandemic continues, observers believe North American fryers have 10 million cwt more potatoes under contract than needed. Some of those potatoes have been diverted for other uses, but fryers are still expected to be running storage potatoes through Sept. 15 or later, the report says.

While fresh potato sales spiked during the last half of March as consumers panic bought, they ate into the limited supply of storage potatoes — which threatens to create a supply gap for red and yellow potatoes. Though supplies of Russet table potatoes were tight before the 15 per cent increase in March shipments, spillover potatoes from the processing sector should improve Russet storage supply conditions, the report notes.

The closure of in-restaurant dining has created an imbalance though for Russet table potatoes, the report says. Most Russets are now being sold through grocery stores in bags, while demand for large cartons, which are usually sold through food service outlets, is extremely limited. This is driving carton prices down.

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