Global French-fry Trade Might Not Recover Until 2022
According to Bruce Huffaker, president of North American Potato Market News, last year at this time, potato supplies were tight, demand was solid and prices were expected to be strong in 2020, but COVID-19 scrambled that outlook.
“It’s been a very big challenge for the industry and for people in general,” said Huffaker, quoted by Capital Press. But there are some promising things for 2021, including vaccines and recovery from the depths of the downturn in the early months of the pandemic, he said during the University of Idaho Ag Outlook Seminar.
“Looking at the global French fry trade, which is a microcosm of the potato industry, it was running about 11% above a year earlier from October 2019 through February 2020. From April to June, it declined 30% below year-earlier levels. It’s been recovering since then and was only down 2.8% in September, although North American French fry exports are still running about 15% behind last year’s pace,” he said. Since 2003, global French fry trade has never declined from the previous year except for 2020. It won’t be back on trend in 2021, but it might be able to get back there in 2022, he added.
Looking back on 2020, U.S. potato production fell 2.8%. Last spring, processors in the U.S. reduced their contract volumes by 15% to 20%, he said. “With frozen processing making up about a third of the crop, you would have thought that would result in about a 15% production decline,” he said. Production was down 8.3% in Washington and up 10.2% in Oregon, a fairly minimal combined decline. French fry processors in the region cut contract acreage close to 20%, but yields came out much stronger than expected, he said.
According to the specialist, retail sales of 5- and 10-pound consumer bags are way up, and the government food box program also boosted demand for those potatoes.
Processing of both old and new crop was down 11.8% June through November, and that big drop is a concern, the specialist said. “However, the evidence now is that the biggest part of the decline, at least in the Pacific Northwest, is behind us,” he concluded.