- Situation and Outlook
for Frozen French Fries
- In 1998/99, french fry
exports from the 3 major exporting countries, the
Netherlands, Canada, and the United States, are
forecast at a record 2.1 million metric tons, 7
percent above the previous years shipments.
All three countries are expected to register
export gains in 1998/99, with Canada leading the
trio in export growth. Canadian exports are
forecast to increase 12 percent in 1989/99 to
500,000 tons. Canadian exports have experienced
double-digit growth rates for the past several
years, largely due to the expanding domestic
processing industry. U.S. frozen french fry
exports reached a record $304 million and 424,848
tons in 1997/98, more than double the volume and
twice the value of just 5 years ago. U.S. french
fry exports are forecast to increase 6 percent in
1998/99 despite the Asian financial crisis.
Rising per capita incomes in many countries,
ongoing Market Access Program activities, and
expansion of the fast food industry, particularly
in East Asia, are expected to continue to spur
demand for french fries. Japan is the largest
U.S. market, accounting for over half of U.S.
- United States
- The 1998/99 U.S. potato
crop is forecast at 21.6 million tons, 2 percent above
the previous seasons harvest but 4 percent below
the record large crop of 1996. Production is down both
for the eastern and western states while production is
forecast to increase for the Central states to 4.9
million metric tons, a jump of 11 percent from last year.
The 1998/99 U.S. potato crop is expected to be the second
largest on record.
- About 28 percent of U.S.
production potato is used to produce french fries. With a
relatively large U.S. potato crop and a steady domestic
demand for french fries, U.S. french fry production in
1998/99 is forecast to rise slightly to 3.4 million tons.
From 1990 to 1997, U.S. production of french fries
increased over 4 percent annually. Most of the growth in
U.S. french fry consumption comes from sales to the food
- With the expansion of the
U.S. french fry industry, exports of french fries,
especially to food service markets, have risen
significantly. In 1998/99, U.S. exports of french fries
are projected to increase almost 6 percent to a record
450,000 tons (20 percent of domestic production). In
1997/98, exports registered an 9-percent gain over the
- The top 5 U.S. french fry
markets accounted for nearly 75 percent of 1997/98
shipments. These countries include Japan; with 52 percent
of total exports; Hong Kong at 7 percent; South Korea and
Canada with 6 percent each; and Taiwan at 5 percent.
Latin America is relatively a new market; the largest
markets are Mexico, with a 70 percent share, followed by
Chile, Argentina, and Brazil. However, export prospects
to South America are for the time limited given the lower
transportation costs enjoyed both by the Canadians and
- Expansion of the
international fast food industry, product quality, rising
incomes in many countries, and ongoing Market Promotion
Program activities have all played a role in stimulating
demand for U.S. french fries. Export prospects for the
next decade are very promising, given the sustained and
continued expansion of the international fast food
- In 1998, Dutch fresh potato
production is expected to continue upward with the Dutch
crop estimated to increase 4 percent, at 5.4 million
metric tons. However, the yield is forecast to be lower
in 1998, due to heavy rains and pest infestations such as
late blight and brown rot.
- The Dutch are by far the
largest exporter of frozen french fries in the world. In
1997/98, Dutch exports totaled 1,088,000 metric tons; for
1998/99 exports are forecast to increase about 5 percent.
According to Dutch industry sources, several factors
contributed to stronger exports. First, the continued
growth of quick service restaurants throughout the EU,
particularly in southern Europe, propelled exports, due
to the proximity of Dutch plants. Second, Hollands
processors of frozen potatoes have expanded sales to
markets outside of Europe, e.g., Middle East and South
America. About 90 percent of Dutch exports go to other
countries in the European Union (EU).
- Imports of french fries
into the Netherlands have remained small, accounting for
about 5 percent of total supply. From a limited base,
1998/99 imports of french fries are forecast to increase
about 17 percent with an unchanged Dutch potato harvest.
- Reacting to strong domestic
and foreign demand for french fries, Canadian potato
farmers continue to expand planted area, particularly in
the provinces of Manitoba, Alberta, and Saskatchewan. In
1998, potato production in these provinces combined
increased 10 percent to 1.3 million tons, accounting for
31 percent of Canadas entire potato crop. The total
Canadian harvest for 1998 is estimated to have increased
2.6 percent to 4.2 million tons.
- Canadas french fry
production rose 13 percent in 1997/98 to 860,000 tons and
is forecast to increase by almost 5 percent in 1998/99.
The trade anticipates frozen french fry production to
exceed one million metric tons by the year 2000 as
processors in Canada continue to invest heavily in new
potato processing plants in the western provinces.
- A major U.S. french fry
company, which wants to remain fully competitive with its
Canadian and U.S. rivals, is building a state-of-the-art
potato processing plant in Alberta. Just recently, a
Canadian processor announced plans to build another
potato processing plant with an annual capacity of 90,000
metric tons of frozen french fries, and will be
constructed to allow for a doubling of production for
- Canadian french fry makers
increasingly depend on exports for additional sales.
Exports in 1997/98 increased 30 percent to a record
447,677 tons, reflecting expansion of french fry capacity
in the western provinces and increased production for
export at Eastern production points. Canadian exports to
the United States accounted for more than 83 percent of
total frozen french fry exports in MY 1997/98. Exports of
french fries to the United States increased by about 37
percent over MY 1996/97 and are expected to continue at
double-digit growth rates for the near future.
Construction of new processing facilities, contracts to
supply major U.S. fast food companies, and a lower valued
Canadian dollar continue to fuel the growth in export
demand. Some of the other Canadian markets include Japan,
Venezuela, Brazil, Malaysia and Guatemala. An increase in
exports to the Pacific Rim countries is expected given
the expansion in processing capacity.
- Canadian imports of U.S.
frozen french fries nearly doubled in MY 1997/98,
reaching more than 23,500 metric tons. Small increases
are projected for the future given Canadas
revisions to package size requirements, albeit tempered
by a strong U.S. dollar and increased Canadian
- In December 1998, the
Canadian Food Inspection Agency amended the regulations
prescribing standard container sizes for frozen french
fries by establishing a new standard container sizes
between 2 and 20 kilograms. For years, U.S. exports of
frozen fries faced onerous packaging size rules, which
limited sales of frozen french fries to Canadas
food service sector.
- Japanese production of
frozen potatoes is relatively small and continues to
decline as farmers focus on the more profitable fresh
market. In 1997/98, less than 3 percent of Japans
total potato was processed. Hokkaido, in the northern
islands of Japan, accounts for over 75 percent of the
nations fresh potato production.
- Despite Japans
sluggish economy, imports of frozen french fries continue
to grow at an annual growth rate of 7 o 10 percent. In
1997/98 french fry imports were 250, 786 metric tons, up
from the previous years level of 234, 242 metric tons.
Industry sources expect fast food sales will continue to
grow rapidly into the 21st century, boosting
imports of frozen potatoes. The United States supplied 87
percent of Japan's french fry imports. Canada held a
10-percent market share, while China and Australia
accounted for 2 percent and 1 percent, respectively.
- As elsewhere in the world,
most french fries (nearly 90 percent) in Japan are
consumed at international fast food hamburger chains,
with the balance served at western style family
restaurants, snack bars, and food service restaurants.
Japan has more than 6,000 hamburger shops, with one
international fast food chain of over 2,600 stores,
consuming over 40 percent of the nations frozen
french fries, or 100,000 metric tons annually. Sales of
frozen french fries are relatively small, with no
significant changes in consumption patterns expected.
- For further information
on supply, distribution, trade, and U.S. marketing
opportunities, contact Ted Goldammer at 202-720-8498.
Last modified: Thursday, April 06, 2000