May 15, 2020
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Foodservice shutdown leaves County potato industry struggling

Courtesy of Hemphill Farms | BDN
Courtesy of Hemphill Farms | BDN
Two 10 pound bags of potatoes sit among other potatoes the Presque Isle-based Hemphill Farms has sold to the public since the beginning of the COVID-19 pandemic.

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PRESQUE ISLE, Maine — Few foods are as associated with American cuisine as french fries. So why are potato processors sitting on pounds upon pounds of America’s favorite side dish?

Because manufacturers package them in big food service bags that cannot be easily broken down into retail packaging. This is the heart of the crisis faced by Maine’s highly specialized potato industry — brought on by the shutdown of restaurants and cafeterias across the country during the COVID-19 pandemic.

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About 12-15 percent of potatoes from the 2019 harvest have gone unsold so far, Maine Potato Board Executive Director Don Flannery said. And because of the steep decline in demand for the 2019 crop, farmers’ spring potato planting likely will be down at least 5,000 acres — about a 10 percent drop in acreage since last year.

He said the Maine potato industry is especially hurt by the virtual shutdown of the foodservice industry, which is the majority purchaser of Maine’s potato crop.

“It’s going to have a negative impact on every potato grower in Maine and every potato grower in the United States,” Flannery said. “That level has yet to be seen because there are still too many questions unknown.”

Lower demand from restaurants leaves potato processors with bags of frozen french fries that can’t find a home, even as a spike in frozen french fry sales nationwide leads to shortages in many supermarkets.

These large brown bags of french fries are far too large to fit on most supermarket shelves, Flannery said. Additionally, because of specialization within the industry — along with food safety issues — for many processors, it is impractical to repackage for retail.

“These french fries are already in the bags,” Flannery said. “[Processors] may not have the equipment to package retail because it’s a whole different infrastructure.”

Garrett Hemphill, co-owner of Hemphill Farms in Presque Isle, is one of many farmers whose bottom line is being hurt by the “new normal.”

His farm usually sells seed potatoes to local growers, who in turn sell to processors McCain Foods, Pineland Farms and Penobscot McCrum.

But those processors are now asking for 16 percent fewer potatoes from those growers, leading to a decline in sales for Hemphill Farms. The farm has begun to seek alternative markets, including selling 50-pound bags directly to customers across The County.

While Hemphill said his family farm — which celebrates its 100th anniversary this year — would survive, 2020 will not be nearly as successful a year as it had projected.

“Without restaurants, there is just not as big a demand for processed fries and potatoes,” Hemphill said.

Dominic LaJoie, a partner at the Van Buren-based LaJoie Growers, said millions of pounds of his potatoes are still without a home because of a reduction in demand from manufacturers and planters.

The economic shutdown creates a “domino effect,” causing potatoes to have fewer and fewer markets across the country, LaJoie said. And it is about far more than just restaurants — the regular sale of potato products to cafeterias, colleges, sporting events, concerts and conventions are all on hold right now.

“Fifty-eight percent of potatoes grown in the U.S. are grown for food service,” LaJoie said. “If you close food service, 58 percent of your business comes to a screeching halt.”

LaJoie said he was saddened by the precarious situation potato growers across the country are now in because of the country’s economic shutdown.

He remained hopeful that the economy will not be in the same state when the harvest completes in the fall. Otherwise, it could spell ruin for many potato farmers in Maine and beyond.

“Small businesses operate on operating lines and loans,” LaJoie said. “If we can’t pay those lines and maintain our credit history, we are just going to go out of business.”

As growers prepare to plant the 2020 potato crop in the coming weeks, uncertainty looms over what the economy will look like when the harvest finishes in the fall. And because of decreased demand from the foodservice sector, farmers said their businesses won’t come close to regular sales as long as the economy remains partially closed.

The decline in demand represents a potential crisis for the County potato industry unlike anything it has seen before. Indeed, the nationwide food industry has remained open through past struggles.

The early 1990s saw the rise of potato blight issues that warranted a federal response from the Clinton Administration, and continue to afflict the potato industry today. Yet, the issue was far from an existential threat for the potato industry, which has devised practice-proven methods to fight the problem.

Even during the aftermath of the 2007 Financial Crisis and resulting Great Recession, restaurants remained open and the industry remained strong, according to press reports from the time.

Watch: State labor commissioner speaks to unemployed Mainers

 


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