The situation changes every day, but potato acres in Canada and the United States could take a dramatic hit in 2020. Potato production may drop by 25 to 30 percent because of closed restaurants, a sharp decline in french fry consumption and the economic fallout from COVID-19, writes Robert Arnason in the Western Producer.
“I would say across North America … the processors are going to ask us to seed between 70 and 75 percent (of normal),” said Terence Hochstein, executive director of Potato Growers of Alberta. “Some (regions) are more and some are less.”
The potential acreage cuts are for process potatoes, which are used to make french fries and other frozen potato products. Process potatoes represent the bulk of potato acres in Canada and the United States.
Tens of thousands of restaurants are now closed in North America because of the risk of spreading the coronavirus. As a result, Canadians and Americans are eating fewer french fries than usual.
“It doesn’t take a great scientist to figure it out. Once the sit-down portions of restaurants closed … then all you have left is drive thrus to (sell) french fries,” said Kevin MacIsaac, general manager of United Potato Growers of Canada.
The immediate consequence is that potato processing plants operated by McCain Foods, Cavendish Farms and J.R. Simplot have cut production of french fries, hash browns and frozen potato products.
Cavendish Farms, which operates a french fry plant on Prince Edward Island, has instructed growers in that province to sell potatoes to other markets.
In the spring, companies and provincial potato grower associations in Canada hold meetings to negotiate the volume and price of processing potato contracts. Those negotiations are messy this year because of COVID-19. It’s difficult to predict how long restaurants will remain closed and when demand for french fries will be restored.
“These losses are expected to be severe at least through May and will probably take at least six months before returning to normalcy based on industry projections,” said Potatoes USA, which represents American potato growers.
On its website, the group said foodservice accounts for 85 percent of all frozen potato sales. A significant percentage of french fries produced at Manitoba plants are exported to fast food restaurants in the U.S. Midwest.
The cuts to volume come at a time when Manitoba and Alberta’s potato industry was poised for expansion. Only a month ago, processing plants on the Prairies were planning to contract more acres of potatoes. More spuds were needed because Cavendish Farms opened a $400 million plant in Lethbridge last year and JR Simplot spent $450 million to double the size of its facility in Portage la Prairie.
“An additional 3,500 acres will need to be planted this year to meet the needs of the Cavendish Farms Expansion,” United Potato Growers of Canada said in a March report. In Manitoba, about 5,000 more acres were needed to satisfy the JR Simplot plant.
Source: Western Producer. Read the full, original report here