Potato Acreage Expected to Decrease by 30%
Potato acres in Canada and the United States could take a dramatic hit in 2020. According to Western Producer, potato production may drop by 25% to 30% because of closed restaurants, a sharp decline in French fry consumption and the economic fallout from COVID-19.
“I would say the processors are going to ask us to seed between 70% and 75% of normal across North America,” said Terence Hochstein, executive director of Potato Growers of Alberta, for Producer.com.
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, 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.
MacIsaac said the situation is similar across the country. Processors have filled up their freezer space and slowed or stopped production of French fries and hash browns.
The short-term impact on Canada’s potato industry is clear, but the mid-term consequence is more complex.
“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.
The economic upheaval from COVID-19 will constrain potato acres in 2020 as French fry processors use up potatoes from the 2019 crop. If French fry sales remain weak for months, that stockpile will last much longer than usual.
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 USD400m plant in Lethbridge last year and JR Simplot spent USD450m 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.
The acreage expansion is now on hold as Canadian growers and the potato industry wait for French fry consumption and the world to return to normal.