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Potato surplus impacts major french fry producers after demand took a dive last year

French fry producer Lamb Weston Holdings reports to write off $71 million after in excess supply to honor last year’s contracts with farmers. The loss is the latest news in an unfortunate chain of events concerning a surplus of potatoes across the North West last year.

After facing potato shortages in the the prior two years, potato farmers reportedly harvested an additional 55,000 acres of product during 2023. Farmers overestimated the demand. Due to pandemic restrictions easing up, it was thought diners would continue to visit restaurants more frequently, however, halfway through the year traffic collapsed and so did demand from restaurants to suppliers. According to the National Restaurant Association, inflation has had a big impact on the restaurant industry, although trends started to look less grim towards the end of the year.

The impact on farmers was irreversible as it led to 165,000 tons being destroyed last October according to nwnewsnetwork. Now french fry suppliers are left to foot the bill following an overly aggressive sales forecast.

“Per our agreements with our growers, we’re obligated to purchase all the potatoes grown on these contracted acres. However, our initial sales forecast has turned out to be more aggressive than our current estimate, reflecting recent restaurant traffic demand trends,” Tom Werner, President and CEO of Lamb Weston, stated the following during a second-quarter earnings call on January 4th per fooddive.com.

After an uptake in same-store sales across the restaurant industry during November of last year, it is suspected the restaurant industry will have a rebound.  Lamb Weston is optimistic and expects sales volumes to recover in fiscal 2025, they are currently in contract negotiations with farmers but they did not indicate whether or not they will buy as many potatoes this year.


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