Russet potato contracts cut - Sales of frozen potatoes drop as restaurants close

There will be fewer acres of Russets going into the ground in northern states this spring. Processors are cutting back on their contracted acres in response to a reduction in sales of frozen French fries and other potato products.

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 food service industry businesses, like those in many other sectors of the economy, were closed in an effort to stem the spread of coronavirus.

“There’s no doubt there has been a negative impact on what the processors are doing,” said Donavon Johnson, Northern Plains Potato Growers president in East Grand Forks. “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.”

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 World Potato Markets, a weekly electronic newsletter that monitors potato markets in Europe and other countries around the globe. That means the amount of acres contracted in 2020 would be 7.6% lower than 2019 contracted acres, and would be the least 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 United States, talk in the potato industry is that, depending on the processor, North Dakota Russet contracted acres have been cut 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, he said.

“I’m actually thrilled they’re being as good as they are,” Hoverson said.

However, though the reductions in contracted acres are less than Hoverson anticipated, they still will feel a financial hit. The 10% reduction in Hoverson’s contracted Russet acres, for example, will decrease his potato acres by 500.

“All of your costs are spread over less acres,” Hoverson said. “It hurts a lot; makes your margins a lot less.”

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 unsaleable frozen product on hand.

“It was probably a lucky thing they were short,” said Hoverson, who left about 20% of his 2019 Russet acres unharvested.

Ideally, Hoverson would have liked to kick off the 2020 potato planting season Monday, April 20, but with fields still wet and soil temperatures cold, that is highly unlikely.

“It would take a miracle for that to happen,” he said. Barring that, Hoverson Farms aims to begin planting potatoes by April 27.

Hoverson said he hopes that, by the time he and his sons are ready to plant, they will have a full work crew. As of this week, nearly half of the 24 South Africans Hoverson Farms employs during the growing season had not yet arrived. The arrival of 10 workers was delayed by the coronavirus pandemic, until May 1.

Once the remainder of the workers arrive, they, like the 14 who came earlier this spring, will be quarantined for two weeks, Hoverson said. The quarantine can be in the tractor, and the workers, who will be housed in rural Larimore, will have food delivered to them.

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,” Johnson said. “It’s hopefully going to be a normal spring.”

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