Exclusive: North America Speeds Up Investments in Processing
Strong domestic and export demand plus extra processing capacity means US processing potato usage is running at record levels. Total usage from the beginning of August 2018 to February 2019 was at 5.962m tons, according to USDA NASS figures, which is 6.0% more than in the same period last year. Total usage is on course to beat the seasonal record of 12.408m tons set in 2016/17.
By Cedric Porter, Editor of World Potato Markets
The US has more potatoes to use this season, with fall production of all types in 2018 estimated by the USDA at 19.057m tons, 3.3% up on the 2017 figure and the largest recorded figure ever. By the beginning of February, it is estimated that 9.702m tons of potatoes were still in store, representing 50.9% of the overall 2018 crop, meaning there is 240,000 tons more in stock than the same point last season. With shortages of potatoes in Canada and the EU, US processors will be keen to use the remaining stocks they have as efficiently as possible.
North America has sped up its investment in processing plants. US industry sources estimate that from 2018 to 2020 processing capacity will have increased by nearly one million tons, resulting in the need for another 40,000 hectares of potatoes.
In 2018 expansion at Lamb Weston’s Richland, Washington State plant required an extra 159,000 tons of potatoes, with an extra 90,700 tons required in McCain’s, Burley, Idaho plant in 2018, with similar extra demand expected in 2019. A number of companies in the East of the US and Canada increased their demand for potatoes by nearly 100,000 tons too in 2018.
This year should see expansion by Lamb Weston, Cavendish Farms, Simplot and McCain in Oregon and Idaho in the US and Alberta and Manitoba in Canada, which will increase output by nearly 500,000 tons. Further expansion is already due to come onstream in 2020, with more expected. Local reports suggest that McCain is looking to buy an eight hectare property in Caldwell, Idaho to build a 9,300 square meter facility. The company opened a 35,000 square meter plant in 2014 in the town. A deal to buy other land in Caldwell last year fell through.
For the complete article, please read the March-April 2019 issue of Potato Processing International.