Home News Michigan Ag News Impacts of COVID on Domestic, International Potato Markets

Impacts of COVID on Domestic, International Potato Markets

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Now that the closed food service industry starting to open back up, the potato industry is hoping for a recovery.

Coming into 2020, the U.S. potato industry was in a strong position. In 2019, the utilization of U.S.-grown potatoes was up 3.3 percent from increases in exports, retail sales, and food service sales. There was also a slight decline in imports.

According to John Toaspern, chief marketing officer of Potatoes USA, potato sales were increasingly going through the food service channel. When food service essentially closed in March, it had a major impact on the potato industry.

“Sales at food service dropped significantly—almost 50 percent—in March, April and May,” he said. “Of course potato products were right there with this decline—particularly frozen fries, but also fresh and dehydrated saw significant reductions in demand.”

On the flip side, Toaspern said retail sales “exploded” as more people were eating from home.

“We could have sold even more potatoes if we had the ability to meet the demand, but the supply chain had to get changed to do that and move from the food service product to the retail product,” he said. “Even with these shortages, we saw significant increases in sales of potatoes and potato products.”

Fresh sales were impacted the most but russets saw the most growth since they are the largest type of potato at retail. Internationally, food service in Asia and Latin America shut down, even before it happened in the U.S.

“This led to a backup of ingredients that were coming from the U.S. and other places, and U.S. fries was one of the most impacted by the shutdown,” said Toaspern.

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However, Toaspern said there wasn’t an impact in trade numbers until March, and even those numbers weren’t significant.

“Exports for the fiscal year, July through March, are actually still up,” he said. “It’s April when we really start to see the impact, and this is where we see that exports declined significantly—29 percent for frozen, 31 percent for fresh, and not quite as big of a decline for dehydrated.”

Now that food service in Asia has reopened, Toaspern is optimistic that it will turn around the export picture. He’s hopeful that by July, things will be back to normal in terms of the international market place. With the domestic supply chains adjusting, Toaspern thinks that sales will return to what they were pre-pandemic.

Toaspern’s comments were taken during the National Potato Council’s Summer Virtual Meeting June 25, 2020