Southern Alberta Processing Industry Hit Hard by COVID-19
Southern Alberta’s big three potato processors Cavendish Farms, McCain Foods, and Lamb Weston have cut the total size of contracted acreage this spring by 20% to 25%, due to plummeting French fry sales caused by mass restaurant closures across the region.
“75 % of the French fry industry is QSR (quick service restaurants) in Western Canada, and that’s come to a screeching halt,” said Terrance Hochstein, executive director of the Alberta Potato Growers, for ctvnews.ca. Hochstein said the extent of the problem went far beyond Alberta. "Lamb Weston has 13 plants in the state of Washington. Today, as we spoke there was [only] one of them running.”
The Alberta Potato Growers said the processors have either shut down, or are preparing to, because there’s no freezer space left. “Our biggest fear right now is the fact that we've lost 20% of our volume for the 2020 crop, and we still have a huge amount of volume left in the 2019 crop and nothing is running.”
Andrea Davis, director of public affairs for McCain Foods provided a statement saying: “While our Coaldale facility is currently running, with enhanced safety measures based on public health guidance, there is an upcoming planned shut down for maintenance scheduled. We continue to monitor the situation closely, in this uncertain time.”
Hochstein said the potato growers expect all of the French fry processors will be going down. “This will be the first time in history that all three of our fry plants will be down at the same time.”
The PGA estimates about USD70m to USD80m worth of processing potatoes are still in storage. The organization said there was a brief surge in the sale of fresh market potatoes at grocery stores, but that pipeline has also become plugged. The pandemic hasn’t impacted potato chip sales, and Alberta’s two potato chip processing companies, Pepsico-Frito Lay and Old Dutch, are still operating.
Hochstein said growers expect French fry sales to rebound, but added that won’t happen overnight, with the impact on the potato industry will likely be felt for years to come.
