US Potato Contracts Cut Due to Lack of Demand

There will be fewer acres of Russets planted in US northern states this spring, as processors cut back on their contracted acres in response to a reduction in the sales of frozen French fries and other potato products.
According to West Central Tribune, the closure of fast-food businesses and restaurants last month has drastically curtailed the sales of frozen potato products in the United States and around the world. The foodservice industry businesses, like those in many other sectors of the economy, were closed in an effort to curb the spread of coronavirus.
“There’s no doubt there has been a negative impact on what the processors are doing. There’s a need for less production, so that means less acres, not just in this area, but all across the northern tier, Washington, Oregon, Michigan, Wisconsin, Maine,” said Donavon Johnson, Northern Plains Potato Growers president in East Grand Forks.
Contracted potato acres in the Western European countries of Belgium, the Netherlands, France, Germany and the United Kingdom could be reduced by nearly 8% to 785,589 hectares, according to Word Potato Markets. That means the amount of acres contracted in 2020 would be 7.6% lower than last year, and would be the smallest amount contracted since 2016. World Potato Markets, meanwhile, pegs this year’s Canadian potato acres at 134,812, 8.6% less than last year’s acreage.
In the US, word in the potato industry is that, depending on processor, North Dakota Russet contracted acres have been cut by as much as 20%. J.R. Simplot in Grand Forks has cut its contacts by 10% to 12%, said Carl Hoverson, a Larimore, N.D., grower. Hoverson, a longtime grower for the potato processor, was anticipating larger cuts, so was pleasantly surprised and said: “I’m actually thrilled they’re being as good as they are.”
However, though the reductions in contracted acres are less than Hoverson anticipated, they still will feel a financial hit. “All of your costs are spread over less acres. It hurts a lot; makes your margins a lot less,” Hoverson added.
Ironically, the adverse conditions of last fall that resulted in a reduction of acres harvested in northwest Minnesota and northeast North Dakota might have helped processors, according to Hoverson, who noted that, if farmers had been able to harvest all of their acres, processors would have had even more unsellable frozen product on hand.
“It was probably a lucky thing they were short,” said Hoverson, who left about 20% of the company’s 2019 Russet acres unharvested.
Johnson, like Hoverson and other farmers, said he hopes that the weather warms and remains dry, so planting can get rolling and farmers can put last year’s harvest and the current pandemic behind them. “We’re totally concentrating on the planting side. It’s hopefully going to be a normal spring,” Johnson said.















