The potato acreage in the United States is expected to grow after a sharp decrease last year. However, the level of 2019 will not be achieved. The greatest growth is in the chip potato growing areas. Processors have expansion plans and that requires potatoes.
Insiders estimate that the potato area for the 2021 harvest year will be more than 385.000 hectares. Last year the area reached almost 373.000 hectares, when growers made significant cuts in anticipation of the corona crisis. Some companies grew a quarter fewer potatoes. Despite a growth of more than 3%, the area of 2019 (390.000 hectares) is still far from being achieved.
Growth in largest growing area
The greatest growth is in Washington state. Insiders talk about 10% more potatoes. That is special, because contracting is also difficult there. Potato growers wrestle with their increased costs and factories do not want to increase contract prices further. Last year, growers in the Columbia Basin (the largest growing area in the US) made significant cuts in production. That is why they would like to grow more potatoes this year. Some potato production is also shifting from Oregon to Washington. Most processors are at 90% to 95% of their 2019 contract volume. McCain Foods is the exception. The company will start using a new production line at the end of this year. Potatoes are needed for that.
In percentage terms, the state of Texas is growing the fastest after Washington. In absolute hectares, this growth is considerably less. Idaho, the largest potato state with 125.500 hectares of potatoes, will also grow more potatoes. Insiders think about 3%. In the state of Maine, cultivation is increasing by 8%. This also has to do with increased processing capacity in this area. After a dry growing season, table and seed potatoes are in high demand, making these market segments feel positive.
Taking advantage
Growth in potato cultivation is not surprising. Potato and chip consumption in the country has held up well during the corona crisis. Americans eat a lot of potato products, the fast food sector is enormous and the takeaway segment is also well represented. Belgium and the Netherlands have been able to benefit from this good market for fries and have exported heavily.
More free potatoes
U.S. processors are especially hesitant about their export markets. If the corona pandemic continues to cause economic problems, it will cost volume. Although more potatoes are being contracted, the volumes are still below the 2019 level. Factories do not want to take additional risks. With the current acreage figures, it looks like arable farmers are planting enough, which means that more free potatoes are for sale. Processors can always buy these when sales of the end product are going well.