Coronavirus cuts into global french fry demand
ELTOPIA, Wash. (AP) - For farmer Mike Pink, spring is supposed to be a time of hope, when he can survey a green field of young potato plants and anticipate the bounty to be pulled from the sandy soils of the Columbia Basin.
This year, this is a season when dreams die. Due to an epic potato glut that imploded his market, he has decided to do what was once unthinkable — destroy part of his crop rather than sink more dollars into cultivation.
That grim task unfolded Friday as a diesel tractor began discing under 240 acres of Ranger Russets, plants that if left in the ground until summer would likely have yielded more than 14 million pounds of tubers.
"It is just devastating. I have been dragging my feet, hoping something happens, and someone says they can use these," Pink said. "Once I destroy them, they're gone. But I just don't know what else to do."
His plight is another ugly impact of the novel coronavirus pandemic, which has dramatically changed where people consume food, and upended a powerhouse Washington industry producing frozen french fries for global markets.
Last year, state potato farmers grew some 10 billion pounds of these spuds — the vast majority of which were destined to be cooked up in fast food and other restaurants, primarily in Asia, but also in the United States and elsewhere in the world. During the past two months, fast food sales have dropped sharply, and the cancellation of professional basketball, baseball and all sorts of other events have vastly reduced the number of venues where french fries are served. Even sports bars where customers would have munched on baskets of fries as they watched their favorite teams play are now shuttered.
The fallout already has prompted one major processor, McCain Foods, to temporarily suspend a $300 million expansion of a plant in the Adams County community of Othello that would have produced french fries from potatoes grown on 11,000 acres, according to Chris Voigt, executive director of the Washington Potato Commission.
Without a major reversal of demand, 1 billion pounds of Washington potatoes — 10 percent of last year's $845 million crop — could still be piled up in warehouses later this summer as the new crop starts to be harvested. The federal Agriculture Department in April announced a $19 billion coronavirus emergency program that includes provisions to buy farmers crops and make them available to those in need. But it is uncertain how much of a dent that federal spending will make in the huge potato surplus, and some could end up being discarded on a scale never seen before in the Pacific Northwest.
"They haven't been dumped, but I fully expect there will be potatoes dumped. You can't store a potato forever, said Dale Lathim, executive director of Potato Growers of Washington, an industry group.
The downturn facing Washington potato farmers is part of much broader upheaval in agriculture in the U.S. and Washington state, which in recent years past was worth more than $10 billion annually.
This year, the state dairy industry already has been slammed by lost sales to restaurants, schools and other food services, and prices have dropped by more than 30 percent since March 1, which is far too low for many producers to be profitable, according to Don McMoran a Washington State University Extension official based in the Skagit Valley.
"There are going to be fewer dairy farmers here and around the nation until we get things sorted out," said McMoran, who noted three of 29 dairy operators already have announced this spring that they would cease operations.
The state's beef producers also are in trouble.
Cattle prices have tumbled and markets have become more difficult to find as processors, including Tyson Fresh Meats in Walla Walla County, have temporarily suspended or slowed operations as they battle severe outbreaks of COVID-19 among workers. With processors producing less meat, feedlots are jammed with animals that have yet to go to slaughter.
"It just backs up demand all the way through the system," said Patti Brumbach, executive director of the Washington Beef Commission.
Fries for the world
Idaho dominates the production of fresh market potatoes, a grocery store staple that continues to sell amid the pandemic as consumers grab them by the bag to bake, boil and fry back home.
Washington farmers in the Columbia Basin focus on producing for the frozen market. They sow specialized varieties that yield potatoes often shaped like a pop can, so there is less waste when rectangle fries are cut out of them. They also favor dense high-starch strains that when cooked create fluffy interior textures savored by fry aficionados.
Through the years, these farmers have honed their skills in irrigated desert soils — enriched by volcanic ash — that produce the nation's best yields, some 30 tons per acre on average or more. And as international markets have expanded, they have developed just about every possible acre of potato ground, which typically must be farmed in a four or five-year rotation with other lower-value crops to reduce the risk of disease.
Pink is a first generation basin farmer who grew up outside of Pasco as his father worked as a carpenter at the Hanford nuclear site. He started farming 34 acres back in 1987, and now invests more than $6 million each year of borrowed money to grow 1,600 acres on largely leased land. And though this is now a very big business, he still loves the essence of farming, nurturing a crop from a seed or tuber all the way to a harvest that will help feed the world.
This year, early on, the markets were strong and the weather breaking for an early planting in late March. He grows his potatoes under contract, and both processors he typically sells to appeared confident they would offer him contacts for all his acreage, Pink said.
By early April, processors had revised their plans. As the pandemic's grip tightened, they decided to reduce their contracted acreage by about 20%, according to Voigt of the Washington Potato Commission.
"Nothing like this had ever happened before. That's what caught us off guard," Voigt said.
Pink was hit a lot harder than most farmers.
He was unable to get contracts for about half of his 1600 acres. And fields planted in late March that were sprouting young plants had already soaked up $2,000 of the $4,000 per acre it would take to bring the crop to market.
He now risks a financial disaster that could cause his potato farming operation to fail.
"I just did what I normally do and that's get out and plant my crop in the ground, and do it in a timely fashion. And that came back to haunt me," Pink said.
For several weeks, he wrestled with what to do with the fields that had no contracts.
More than 550 of these acres are later varieties that don't mature until September or October, when perhaps markets may be stronger and he could find buyers. They also are versatile and could perhaps be dehydrated or made into chips. So he expects, in a roll of the dice, to grow them to maturity.
But the Ranger Russets will be coming out of the ground in late July, when the french fry market is still expected to be bleak, and they aren't well suited for the fresh market or other types of processing, Pink said.
He decided they had to go. And on Friday morning, he headed out to a field north of Pasco to watch them disappear under the whirring blades of the discs.
Pink is convinced his business decision was the right move. Still, it felt wrong to him to watch the young plants — known as rosettes — meet their end.
After the disc made a pass, he searched through the sandy earth like a medic looking for survivors on a battlefield. He pulled out seed potatoes that had already begun to put out fat white stems, and examined the tiny young nodules of the new crop.
The field soon will be replanted in feed corn, then sprayed with herbicides to kill off potatoes that resprout.
"It hurts. This has been the toughest thing I have ever had to do in farming," Pink said.
More tough decisions ahead
In the months ahead, other farmers also face painful decisions.
Reagan Grabner, the managing partner of CSS Farms, has invested in four enormous insulated storage units that he dubs the "Taj Mahal for potatoes." Each stretches the size of a football field and can hold 7 million pounds of potatoes grown especially for the french fry markets.
Last year at this time, he already had emptied three of these units. This year, only one, and it's been a month since he last sent a shipment to a processor.
Periodic testing of these potatoes in a kind of laboratory kitchen show they still make good fries. But their shelf life is limited as — over time — more of the starch converts to sugar.
The USDA aid program may buy up a portion of these potatoes. But Grabner still fears he will have a massive amount left over in late July as the new crop arrives.
Grabner says that he and other farmers will do everything possible to find ways to put these potatoes to good use.
But given the scale of the basin production, trying to divert all the surplus to food banks would be like trying to drink from a fire hose, he said.
A portion of his stored potatoes may end up buried in holes, and left to decay.
"These are things farmers don't want to think about," Grabner said. "That's the last resort."