Total economic losses from potato production and processing in 2020, stemming from the demand shocks of COVID-19, are expected to amount to roughly $1 billion in gross state product in Washington State.
The Washington State Potato Commission asked the IMPACT Center of the School of Economic Sciences at Washington State University to identify the economic harm to the potato sector in Washington State resulting from COVID-19 virus demand and supply chain disruptions. The study also discusses the potential tax impacts on the state and the primary backward links in the supply chain that are negatively affected by the reduction in potato production and processing.
Washington’s potato growers and processors have been adversely affected due to the prolonged restaurant closures and associated fall in demand for their product. The fall in demand has been a shock not only directly for farmers and processors but for all the vendors in their specialized supply chains.
In all, farmers have lost roughly $29.2 million dollars from the decline in demand and quality for their 2019 harvest. They have reduced potato acreage for their 2020 growing season by 13 percent. That loss in acreage amounts to roughly 729,120 tons of potatoes, equivalent to the weight of about 76 Space Needles.
Net impacts from this change in acreage and spending has resulted in $270.4 million in lost productivity to the state. Processors that have seen the demand for products like french fries, hash browns, mashed potatoes, etc. plummet, have had to watch their spending plummet in lockstep. Lost processing activity has resulted in $714.3 million in lost productivity statewide.