US French Fry Trade Rebounds

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By Ben Eborn, Publisher, North American Potato Market News

Frozen potato imports and exports have both surged as the U.S. and global economy has rebounded from the pandemic lows. In this article, we look at the change in U.S. French fry exports and imports over the past five years. Due to the trade impact that COVID-19 had during 2020, we compare this year’s trade volumes with the previous three-year average (2017-19). We also discuss some of the challenges that North American exporters will face to maintain their frozen product market share.  

Record US French Fry Exports

The U.S. exported a record 2.24 billion pounds of frozen potato products during the year ending Aug. 31, 2021. That exceeded the year-earlier sales by 260.3 million pounds, or 13.2 percent. It surpassed September-August 2019 sales by 21.7 million pounds, or 1 percent. Except for the 2020 trade disruption created by the pandemic shutdown, U.S. frozen potato product exports have remained relatively steady over the past five years.

The three largest importers, Japan, Mexico and South Korea, accounted for 56.6 percent of the business during the year ending Aug. 31. Japan, the largest importer of U.S. French fries, took 550 million pounds. Mexico more than doubled its purchases of U.S. frozen products during the past year. The country imported 523.4 million pounds of U.S. frozen products. That is 275.5 million pounds more than the 2017-19 average imports, a 100.2 percent increase. At 194.3 million pounds, South Korea’s imports of U.S. French fries nearly matched the 2017-19 average import volume.

Sales to the Philippines, Taiwan and Malaysia were over 100 million pounds each. Exports to Canada totaled 103.7 million pounds, nearly unchanged from the 2017-19 average. China imported 89 million pounds of French fries during the September-August timeframe, 47.5 percent less than the 2017-19 average. Sales to the remaining 67 customers totaled 440.7 million pounds, down 20.9 percent from the 2017-19 average sales volume.

North American fryers captured 29.4 percent of the global frozen potato product market during the year ending Aug. 31, 2021, up from 26.2 percent during the same timeframe in 2020. It is also up from the 2017-19 average of 27.2 percent. EU processors held 66.3 percent of the global market during the September-August timeframe, down from 69.9 percent a year earlier. Argentina captured 2.9 percent of the market, up from 2.6 percent a year ago. New Zealand’s market share fell to 0.7 percent, down from 1 percent a year earlier. On the other hand, China increased its market share from 0.4 percent in 2020 to 0.7 percent.

Record US French Fry Imports

Frozen potato product imports have increased in the past three years. Strong imports have offset reductions in domestic French fry production since March 2020. The U.S. imported a record 2.57 billion pounds of French fries and other frozen products during 2020-21. That exceeded the year-earlier import volume by 258.1 million pounds, or 11.1 percent. It surpassed frozen product imports by 402.7 million pounds, or 18.6 percent, during the same timeframe in 2018-19.

All U.S. French fry imports (other than those from Canada) come from Europe. Combined September-August frozen product imports from Belgium, the Netherlands, Germany, France and Poland totaled 349.9 million pounds, up 1.3 percent from last year and 158.8 percent above the 2017-19 average. Belgium fryers took 71.9 percent of the business. The Netherlands and Germany captured 16.1 percent and 9.1 percent of the business, respectively.

Due to the integrated nature of the North American French fry industry, we consider the U.S. and Canada to be a local trading zone. Otherwise, the U.S. would appear to be the world’s largest importer of frozen potato products. The same operations own plants on both sides of the border. They optimize operations and minimize costs by selling mostly U.S. product to offshore customers and backfilling the U.S. market with Canadian product. Despite the large increase in imports from Europe, Canada’s share of U.S. frozen product imports rose to 86.4 percent from 85 percent a year ago.   

The U.S. imported 327.5 million pounds more frozen potato products than it exported during the year ending Aug. 31, 2021. That net import volume is nearly the same as it was a year earlier, at 329.7 million pounds. In contrast, the U.S. exported 53.5 million pounds more than it imported during the same timeframe in 2018-19. The exports outweighed imports by 139.9 million pounds during 2016-17. Then the U.S. became a net importer during 2017-18 when imports surpassed exports by 56.7 million pounds. Net import volumes for the past two years have been the largest since 2006.

Challenges Ahead

Global French fry demand has rebounded. Offshore French fry and other frozen product demand has been strong. Frozen product exports have surged despite shipping and logistical bottlenecks. The major processing regions in the U.S. and Canada have reported significant yield reductions for this year’s crop. In addition, raw product supplies for European French fry plants are likely to be tight this year. Quality is off for both the European and North American crops. Reduced raw product recovery rates will further cut into global French fry production. If French fry demand remains strong, fryers will likely push up open market potato prices as they attempt to purchase any fry-quality potatoes they can get a hold of. Short raw product supplies could limit North American fryers’ ability to maintain their share of the global French fry trade. 

Key points:

• The U.S. exported a record 2.24 billion pounds of frozen potato products during the year ending Aug. 31, 2021.
• Mexico’s French fry purchases from the U.S. have more than doubled in the past year to 523.4 million pounds.
• North American fryers captured 29.4 percent of the global frozen potato market, up from 26.2 percent a year earlier.
• The U.S. imported a record 2.57 billion pounds of frozen products during the year ending Aug. 31, 2021.
• Frozen product imports from the EU totaled 349.9 million pounds during September-August, 158.8 percent more than the 2017-19 average.
• Raw product supply limitations, quality issues and logistical challenges will make it difficult for North American fryers to maintain their share of the global French fry market during the next year.