Analysis Potatoes
US fries export at lowest level in 13 years
Exporters of fries in the United States are having great difficulty to stay afloat in a highly competitive global market. Despite harvesting a sufficient amount of potatoes, the country is taking a significant hit, as shown by the latest export figures.
In October - the most recent month for which data is available - the US exported over 73,000 tons of frozen potato products, mainly fries. This is a 5% decrease compared to the same month in 2023. The total export in the past twelve months is almost 2.5% behind compared to the previous period.
Negative Result
It is mainly Japan, one of the country's biggest customers, that disappointed in October. One-fifth fewer fries were sent in that direction. Mexico, the largest buyer with 20,000 tons, on the other hand, purchased 15% fewer fries. South Korea also accounted for a 25% increase in volume (6,500 tons). The entire export list is a mix of pluses and minuses. Ultimately, the result is negative.
The financial figures also show a negative trend. In October, exports were worth over $120 million, which is 9% less than a year ago. Over a twelve-month period, exports are still slightly positive. Trade with Mexico, Japan, and South Korea all show a positive trend.
High Prices
In October, an average of $1,653 had to be paid for a ton of frozen fries from the US. This equals €1,574. Although the price of the product has slightly decreased, the level is still 4% higher than a year ago when viewed over the whole year. This is likely where the issue lies. The European price level is considerably lower. Coupled with good potato availability here, there is a lot of competition in the global market.
Given the above, it is noteworthy that the import level of frozen potato products is higher. In October, it was almost 133,000 tons, which is 15,000 tons more than what was imported in September and 6% more than a year ago. Canada supplies over 80% of all these products. The neighboring country saw its exports to the US grow by 5% this season. Following Canada is Belgium. Over a twelve-month period, the volume decreased by 3%, but it still amounts to a respectable 170,600 tons.
Less Dutch Product
When discussing American imports, the Netherlands is negatively impacted. In October, our exports to the country halved, and over twelve months, the volume shrank by almost a fifth. One might think that the price of fries is the culprit here. However, Dutch products were sold for an average of €1,450, while Belgian products averaged €1,556. Even in October, Belgian fries were significantly more expensive. It is likely that the Netherlands simply faces a lot of competition, not only from Belgium but also from emerging countries like Egypt and Italy.
As mentioned, American potato growers have had a good yield this year. Yet, there is still enough demand to import products. The country has a relatively low food inflation rate. According to the USDA, it stands at 2.3% for the whole of 2024. Additionally, Americans enjoy a serving of fries. On average, they consume 13.6 kilos of fries per person per year. This is relatively 'modest' compared to the Netherlands, where the average is 18 kilos.
Eating Culture
0% of this volume is consumed by the American consumer outside of fast-food chains. These chains have seen a slight decrease in revenue this year, but it remains a huge market. Additionally, home delivery of meals, including fries, has become common in American eating culture.
Fries are not the only potato segment that saw a decline in October. The total export of potatoes and potato products amounted to 2.7 million tons in October. This is a decrease of almost 10% compared to last year. While the export of table potatoes increased by 8%, that of chips and dried products, as well as frozen products, decreased.
