By Ben Eborn, Publisher, North American Potato Market News
North American potato growers planted 3.2 percent more ground to potatoes this year than they did during 2020. Acreage remains slightly below 2019 plantings. When estimating production, however, planting is only the first step in the process. We also must account for abandonment and yields. Here, we discuss planted acres, abandonment and potential yields for the U.S. and Canada in order to estimate 2021 North American potato production. Then, we explore demand challenges facing the potato industry.
Planted Acreage
USDA reports that U.S. growers planted 943,000 acres to potatoes in 2021. That is 22,000 more acres than they planted a year ago, a 2.4 percent increase. Preliminary data from Canada show that growers in that country planted 378,625 acres to potatoes this year. That exceeded the 2020 area by 19,145 acres, a 5.3 percent increase. The combined North American potato area is 1.322 million acres, up 41,145 acres, or 3.2 percent, from the 2020 crop.
Due to the market disruption created by the pandemic, U.S. and Canadian growers reduced their 2020 planted area by 0.7 percent and 4.4 percent, respectively. Since 2019, Canadian potato acres have expanded by 4.6 percent, while U.S. potato acres remain 2.1 percent below pre-pandemic levels. Overall, the total North American potato acreage fell 3,000 acres short of the 2019 crop.
Abandonment
USDA projects this year’s harvested potato area at 935,200 acres. That is 21,100 acres more than growers harvested in 2020, a 2.3 percent increase. A year ago, U.S. growers abandoned 6,900 acres of potatoes, 0.7 percent of the planted acreage. During the previous five years, abandonment has averaged 2.7 percent of the potato area.
Canadian growers abandoned 1.3 percent of the potatoes they planted in 2020. That is close to historical norms, excluding 2018 and 2019 when losses totaled 5.2 percent and 5.6 percent, respectively, due to adverse harvest conditions. If we use 1.4 percent for this year’s projected abandonment, Canada’s 2021 harvested area would be 373,324 acres.
Based on these harvested acreage estimates, the combined North American 2021 harvested acreage would be 1,308,524 acres, a 1.3 percent increase from 2020 levels.
Yields, Potential Production
The U.S. long-term trend yield is 460 cwt per acre. That is up from the current estimate for last year’s yield, 453 cwt per acre. Using the trend yield and projected abandonment, the U.S. would be expected to produce 430.2 million cwt of potatoes during 2021. That would be 16 million cwt more than 2020 production, a 3.9 percent increase. It would exceed 2019 production by 5.8 million cwt or 1.4 percent
Canada’s average potato yield has increased by about 3.5 cwt per acre per year for the past 20 years. The trend yield for the 2021 crop is 319 cwt per acre. The current estimate for last year’s crop is 294 cwt per acre. With a trend yield and average abandonment, Canada would produce a 119.1 million cwt crop during 2021. That would exceed 2020 production by 14.9 million cwt, a 14.3 percent increase.
Average abandonment and trend yields suggest that North America’s 2021 potato crop could total 549.3 million cwt. That would exceed 2020 production by 30.7 million cwt or 5.9 percent. It also would be 18.3 million cwt or 3.4 percent more than the five-year average production for the U.S. and Canada combined.
Using trend-line yields and average abandonment is a good place to start estimating total production. It only takes average growing conditions to produce a trend-line yield. However, there are many other factors, such as the drought over the western U.S. and Canada, that can and will impact production between the time I write this article and the time you read it. A lot can happen before harvest is complete.
So far, several eastern and Midwest states and provinces have experienced nearly ideal growing conditions. Colorado has been hit with damaging hailstorms, while the Red River Valley and the Klamath Basin have serious drought and water shortages. Some states are reporting excellent crops while others expect major yield reductions.
Approximately 88 percent of the U.S. potato crop and 56 percent of the Canadian crop has been impacted by drought. This summer, eight of the 13 major potato producing states and five of the 10 provinces have experienced severe to exceptional drought, according to the North American Drought Monitor. The full impact of the heat and drought on the 2021 crop remains to be seen. Considering these factors, North American potato production could fall short of trend yield projections.
Demand is the Wildcard
Potato markets may face complicated demand conditions during the 2021-22 marketing year. Growers planted more russet table potatoes in 2021 than they did in 2020. The increases in Idaho and Wisconsin were partially offset by cuts in the Columbia Basin, the Klamath Basin and Colorado. Last year’s record yields in Idaho, the San Luis Valley and the Columbia Basin are not likely to be repeated this year. In addition, fryers are likely to purchase open market russet potatoes, as evidence suggests that processing potato supplies could be tight. Yields in the key processing states could be reduced due to adverse growing conditions.
Domestic and export demand for French fries and other frozen products has been strong. Quick-service restaurant sales have been improving. McDonald’s reported that during the second quarter of 2021, its global sales jumped 40.5 percent from year-earlier and 6.9 percent above 2019 levels. Though processing contract volumes are up, in most cases, they remain below 2019 levels. Fryers have the capacity to run more potatoes than they have under contract. Chip potato supplies are likely to be plentiful this year. The supply and demand challenges within each sector make it extremely difficult to project market conditions for the coming year.
In the past, potato demand has been relatively stable. Shifting supply typically is the primary factor driving potato prices. That is not the case in the COVID economy. The pandemic turned demand upside down, and it could continue to disrupt markets. Estimating potato supplies seems like an easy task compared to projecting future demand for potatoes and potato products. Even Mother Nature is more predictable than the pandemic and the government’s response to it.
The pandemic lockdowns have impacted the market sectors differently. Demand for table potatoes and potato chips increased initially, while French fry demand plummeted. As the economy began recovering, the demand situation has somewhat reversed. In addition to domestic demand volatility, potato export markets have been strong but variable.
The size of this year’s potato crop and unpredictable demand are certain to cause supply and demand challenges and opportunities that could impact markets until the 2022 crop is harvested.
Editor’s note: To contact Ben Eborn, or to subscribe to North American Potato Market News (published 48 times per year), write or call: P.O. Box 176, Paris, ID 83261; (208) 525-8397; or email napmn@napmn.com.
