Utilization of U.S. grown potatoes increased by 3.3% in volume in 2019 compared to 2018, an increase of 1,183 million pounds. This growth was driven by an 8.8% increase in exports, a 1.2% growth in foodservice sales, a 0.7% increase in retail sales, and a 3.4% decline in imports. All signs pointed to this growth continuing in 2020. Domestic sales and exports were up for January and February before the coronavirus pandemic took full effect.
The full force of the global pandemic and its impact on food sales became very apparent in March. Beginning with the restrictions in China and then elsewhere in Asia, U.S. exports slowed considerably, though trade figures are not yet available to know by how much. Domestically, the calls for social distancing and the restrictions on sporting events, entertainment, bars, and restaurants has led to a drastic decline in foodservice sales. These losses are expected to be severe at least through May and will probably take at least six months before returning to normalcy based on industry projections. Retail sales exploded in March as consumers were forced to eat mainly at home, with excessive buying further exaggerating the situation.
In 2019, domestic potato sales moved further toward foodservice, accounting for 58% of the total volume. Frozen potato sales to foodservice accounted for 85% of all frozen sales. Fresh potatoes sales were divided relatively evenly between retail and foodservice at 52% and 48% respectively.
Reflecting the love for fries and the need for convenience, frozen and refrigerated sales were up to both foodservice and retail. Fresh sales declined only 1% at retail, one of the lowest rates in many years. Chip sales, the largest volume driver at retail, were up 1.1% but did see a 1.6% decline at foodservice in part due to the struggles at Subway.
No one knows for sure what the economic impacts of the pandemic will be and how long they will last, but we do know that the fundamentals of the potato market going into it this era were very good. Potatoes USA accepts no liability for the content of these reports, or for the consequences of any actions taken on the basis of any information contained herein. For further information and to receive the full report please contact [email protected]