The UK’s £1bn potato growing sector has been hit so hard by extreme weather and coronavirus that its largest customer is stepping in with £25m of support to secure its supply chain. The hardest hit growers have been those who sell in the spot market rather than under contract, such as those selling for “fresh chipping” on the premises of food outlets. McCain, which buys about 15 per cent of the UK’s annual potato crop, normally has one-year contracts with growers. But as part of the £25m investment it will put in place a three-to-five-year loyalty scheme so farmers can be assured of their market.
Fast Food/Quick Service Restaurants
Lamb Weston Holdings, Inc. announced in a press release today its fiscal fourth quarter and full year 2020 results and provided a business update for the first quarter of fiscal 2021. “The final months of fiscal 2020 were some of the most challenging in our Company’s history,” said Tom Werner, President and CEO.
Major potato processor Lamb Weston and global quick service restaurant chain McDonald’s saw sales fall significantly in the three months to the end of June, but it could have been much worse. There are also some signs of a recovery in restaurant fry sales, although fears over coronavirus remain, according to Cedric Porter, editor of weekly market briefing World Potato Markets. Lamb Weston’s sales were 16% lower in the quarter than the same period last year, with demand from foodservice distributors and smaller restaurant the most affected.
In a July 2020 post to Reddit, a Taco Bell employee leaked information about some serious menu changes that would allegedly begin in August, 2020, and people were not pleased, reports Heather Clark for mashed.com. They were especially upset to read that “all potato items” would be disappearing from the menu. Taco Bell’s potato enthusiasts even created a Change.org petition titled “Save Taco Bell Potatoes” with over 9,000 signatures as of this writing.
At the height of the COVID-19 pandemic, McCain Foods stepped in to help potato growers by releasing a video encouraging Canadians to eat more french fries, titled ‘French Fries Feed Farmers’. Despite the Canadian government’s relief programs, McCain Foods stated in a release that “the private sector has an important role to play.” The company put several initiatives in place “to show its deep-rooted commitment” to its 130 potato growers across Canada. The campaign is a 38-second video designed for social media highlighting one main message: Eat more fries, Canadians!
Potato acres across Canada are expected to be down for 2020, due to contract volume cuts in March as the pandemic lockdown hit North America, writes Shel Zolkewich in an article published by Spudsmart magazine. Kevin MacIsaac, general manager of the United Potato Growers of Canada, told Zolkewich in a phone interview. “We thought we would have far too many potatoes in the market – and now, the opposite is happening in many areas.”
The release of the end-March stocks estimate did enable the UK domestic market to encapsulate the partial impact that the coronavirus is having on the potato industry. However, it does not allow us to paint the whole picture as we finish this marketing year and head into next season. Anthony Speight, Analyst at AHDB, wrote the following report that we gladly re-publish here.
Signs are showing that frozen fry demand is improving quicker than the industry had anticipated, according to a May 27 report by North American Potato Market News. Restaurant chain sales in the U.S. improved five consecutive weeks from early April to mid-May, although were still down 21%, year-over-year in the week ending May 17.
Consumers have been urged to seek out British potatoes on supermarket shelves to help East Anglia’s growers shift the huge surplus generated by the loss of lockdown demand from chip shops and restaurants. The coronavirus pandemic left thousands of tonnes of potatoes stranded in stores as the food service sector closed down. Some have been redirected to retailers, others have been sold directly from farm shops and delivery schemes, or sold off as animal feed.
Australian potato farmers outraged as $1billion COVID-19 cash splash is given to European colleagues
Australian potato farmers are outraged to discover a $1billion COVID-19 assistance package given to European growers could result in a flood of French fries into the market from overseas. An industry representative body for vegetable and potato growers, AUSVEG, said an influx of about 2.6million tonnes of excess potatoes into Australia would lock farmers out of the fast-food industry. The two biggest potato processors, McCain Food and Simplot, have been working with AUSVEG alongside other companies to address the issue
With restaurants closed due to COVID-19, the potato industry in Canada has taken a big hit. Lukie Pieterse, editor and publisher of Potato News Today joined guest host Heather Morrison of CBC Saskatchewan to talk about the impact the pandemic has had on the industry.
“Pivoting” is a term that has been thrown around by entrepreneurs as they try to deal with the effects of the COVID-19 crisis. But Jose Magsaysay Jr., founder and chairman emeritus of the food kiosk pioneer Potato Corner, pivoting is not always the solution for crumbling businesses. “You pivot depending on your resources. Look into yourself before you pivot. Am I a player now in this crisis? If I’m not and I don’t have the money to pivot, I will just conserve, stop what I’m doing, and spot trends,” he said during a webinar organized by the Philippine Franchise Association on Thursday.
Britain’s farmers are struggling to work out what to do with tens of thousands of tonnes of spare potatoes when their season ends this summer after the closure of fish and chip shops during the lockdown triggered a collapse in demand.
With COVID-19 closures in place all across the United States, and even the world, restaurant demand for potatoes has fallen. According to Frank Muir, CEO of the Idaho Potato Commission, 60% of Idaho potatoes go to restaurants. “We’re trying to move crops in unprecedented times,” Muir said. “Prices were strong but they’ve been dipping. We can’t replace 60% of the food service loss.”
For farmer Mike Pink, spring is supposed to be a time of hope, when he can survey a green field of young potato plants and anticipate the bounty to be pulled from the sandy soils of the Columbia Basin, reports Hal Bernton of the Seattle Times. This year, this is a season when dreams die. Due to an epic potato glut that imploded his market, he has decided to do what was once unthinkable — destroy part of his crop rather than sink more dollars into cultivation. During the past two months, fast food sales have dropped sharply.
Last week saw the release of our end-March stocks estimates. Fresh bags and chipping stocks that remain in grower ownership at the end of March were estimated at 157.3Kt. This shows a 49% drawdown from end of January, suggesting 151.6Kt moved from grower ownership in that time. By the end of March approximately 79% of fresh bag and chipping material had left grower ownership which is 2% lower than the 5-year average. However the question faced is; what will happen to the remaining 21% if the fish and chip trade remains subdued?
McDonald’s Canada today announced Fries For Good, a nationwide initiative to support COVID-19 relief efforts and other recent Canadian tragedies. From May 8-21, 2020, McDonald’s Canada will donate a portion of the proceeds from all fries sold in Canada to the Canadian Red Cross, supporting the Canadian Emergencies & COVID-19 Response Fund, the Nova Scotia Stronger Together Fund, and disaster response and preparedness work across Canada. Fries For Good is also a way for McDonald’s Canada to continue its unwavering support for Canadian farmers.
Here’s why shoppers in the US are currently having difficulties finding frozen french fries: Potatoes USA CEO Blair Richardson joins Yahoo Finance’s Seana Smith to discuss how the coronavirus is impacting the potato supply chain and what that means for farmers.
Beauty is only a peeler away. B.C. potato farmers in Canada are hoping grocery shoppers will embrace less-than-perfect Kennebec potatoes, a variety that’s usually turned into fresh-cut french fries, as local restaurant demand has fizzled during the COVID-19 pandemic. Not only have B.C. restaurants cut their potato orders, reduced demand across Canada has led to a glut of Kennebec potatoes on the fresh market. That’s led to downward pressure on prices as potatoes from other provinces find their way to B.C.
Total acres of Idaho’s iconic potato crop could decrease significantly this year as a result of the coronavirus outbreak. Although there was a rush on potatoes at grocery stores early on, that has abated somewhat and has not been enough to make up for a major decrease in sales of potatoes and potato products through foodservice channels, according to industry leaders. Some french fry processors in Idaho have cut contracted acreage by 10-20 percent this year, according to North American Potato Market News Publisher, Bruce Huffaker.
Manitoba potato growers are feeling the impact of COVID-19, Cory Knutt of PembinaValley Online reports. According to Dan Sawatzky, Manager of Keystone Potato Producers Association: “Acreage will be down this year,” he said. “An estimate might be in that 67,000 range, which is similar to a couple years back. We are seeing demand for fries diminishing, certainly with the COVID-19 virus.
Over the past 3 weeks we have seen the sudden and drastic closure of the vast majority of demand for chipping and bagged potatoes for foodservice markets in the UK. With the chip-shop market being mostly closed, what is the impact on potato tonnages destined for this market? AHDB estimates a balance (at mid-March) of 188,576 tonnes is facing the issue of lost demand.
Lamb Weston Holdings, Inc. announced its fiscal third quarter 2020 results. “Our results in the third quarter were mixed,” said Tom Werner, President and CEO. “At this time, despite only two months remaining in our fiscal fourth quarter, we are unable to reasonably forecast frozen potato product demand because of the pandemic’s unpredictable near-term effect on restaurant traffic in North America and our key international markets.”
New Zealand produces 500 million kilograms of potatoes each year and half of that ends up as frozen chips with the vast majority being sold to takeaway shops and restaurants. Potatoes New Zealand chief executive Chris Claridge said people making do by whipping up their greasies at home. ”That hasn’t made up for a drop in demand from the hospitality sector in the food service sector, which has essentially gone to zero.”
The downturn in consumption has had an immediate impact on french fry processors in Canada and could alter how many potatoes are seeded in 2020. It’s nearly impossible to say when french fry demand will return to normal because it’s difficult to predict when restaurants will re-open and consumers will have the disposable income to dine out. Potato processors and growers across Canada will have to factor COVID-19 into production contracts for 2020.