Can US take advantage of huge French fries hunger?

American potato exports for February, the month for which the most recent figures are available, are slightly higher than 1 year ago. However, the frozen potato products segment ended 4% lower to 73.800 tons. Mainly more table potatoes were exported across national borders. The export of this was almost 20% higher in that month, which amounts to 33.000 tons.

Larger chip supplier
The potato segments together account for more than 1.700 tons of extra exports in February (+0,7%). However, chip exports are lower than 1 year ago. This has to do with the fact that Japan, Mexico and Taiwan purchased less product. China actually purchased 11% more and is an emerging buyer. The Americans also imported more fries from the European Union.

American exporters expect good export opportunities in the coming months. The processing and export pace of European chip bakers is increasing back due to a lack of potatoes. The associated price level of (free) potatoes also ensures that European fries are increasingly priced higher. This is at the expense of exports. American fries are traditionally more expensive, but the price gap is closing.

Production limitations
It's not all looking rosy for the American players. The factories are running at full speed, but cannot keep up with the faster pace. In addition, some factories are experiencing supply problems. Especially east of the Rocky Mountains, there are currently not enough potatoes in storage to see out the current season completely.

In Europe it is always a gamble how much end product the producers have in storage. The United States Department of Agriculture (USDA) does publish figures about this. On April 1, approximately 58.500 tons of frozen potato products were in cold stores in the United States: mainly French fries. That is enough for more than 35 days of consumption. The stock is slightly lower than in the previous month, but higher compared to the situation in 2018.

Enough supplies
Several insiders estimate that the US processing industry could have a supply of approximately 95.000 tons of frozen potato products in the coming months to meet growing demand. 30 days of consumption by factories is used as the minimum stock level. Stocks will probably decrease in April and May, but will be replenished later. This should absorb any increase in demand. Judging from the freezer stocks of fries, sales picked up considerably in March. Already published processing figures support this.

The chip manufacturers in North America have a (luxury) problem. Domestic demand is at a high level. Additional processing capacity is eaten up by this demand, which slows down the export engine. Normally, Canadian factories meet export demand, but due to a lack of sufficient potatoes, this is now not possible. A wet autumn is the cause of this. As a result, more European fries are shipped to the continent.

Demand is not decreasing
The shortage on the international chip market is expected to increase further; certainly until August. Processors then need time to restore their stocks of end product. European factories were already supported by a huge amount of potatoes last year, after the bountiful harvest in 2017.

However, this year is different, making it extremely difficult to supply factories at will. Even if yields in Europe are average this year, the total harvest of a sample area is still 5% below the 2017 level. However, the potato needs of the factories have increased.

American planting season
In the United States, planting and harvesting activities are intertwined. In Florida, harvesting takes place a little earlier than usual. In the important growing region Columbia Basin almost all early potatoes have been harvested, while the growers are planting the last plots for the main harvest. This is on average 1 week later than usual (due to precipitation). Planting is also behind schedule in the northern Midwest, where the weather has been far from favorable. This does not lead to any concerns.