DEMAND AND SUPPLY ASSESSMENT FOR THE MICHIGAN FROZEN POTATO INDUSTRY

This report presents a general assessment of the demand and supply conditions affecting the Michigan frozen potato industry. The information has been drawn from various secondary sources and interviews with key industry informants. The report is one of the major outputs of an ongoing study being prepared for the Michigan Potato Industry Commission and funded by the Michigan Agricultural Experiment Station.This analysis was necessitated by the 80% reduction in Michigan frozen processing potato acreage by Simplot in 1997. This reduction of 5,000 acres for the Grand Rapids processing facility has created both short-term and long-term concerns for the Michigan potato industry. This assessment provides broad background information relevant to determining why this cutback occurred and its likely impact if continued in the future.The report begins with a consideration of demand conditions, including both domestic and international demand trends for consumption and consumer preferences. The report then discusses supply issues, including current North American production capacity, international sourcing trends, competition from Canadian imports, cost considerations, processing innovation, and industry consolidation. The report concludes with a section addressing key strategic issues suggested by the demand and supply trends. |NOTE: This staff paper contains text only. For charts and graphs (exhibits 1-17b) which have been omitted, contact Christopher Peterson at [peters17@pilot.msu.edu].