Canada: Manitoba highest-cost processing potato producer

Manitoba potato farmers could face steeper cuts in contracted potato production unless they can become more cost competitive with other areas of North America, a senior official with McCain Foods says.

Christine Wentworth, McCain Foods’ vice-president of North America agricultural procurement, said in a recent interview Manitoba produces the highest-cost processing potatoes in North America. “The Manitoba region is uncompetitive today and so the future of processing potato growing in Manitoba, at this point, is in the hands of the growing community,” Wentworth said. “It is at a critical point within the potato industry in Manitoba as well as the potato industry in North America.”

However, the Keystone Potato Growers Association, which is currently negotiating 2014 potato prices with McCain, Simplot and Cavendish Farms, says McCain’s figures are not up to date. “I would submit that those numbers aren’t current and probably not very accurate when you look at the exchange (rate between the Canadian and American dollar),” said manager Dan Sawatzky, noting McCain appears to be using figures from last year.

What Wentworth and Sawatzky do agree on is that the North American demand for french fries has been declining and the growth in exports markets has slowed. “Because of decreasing demand this industry is facing some challenges that need to be addressed,” Sawatzky said. “The potato industry really contributes to the economy here. When we start losing some production, it’ll hurt.”

Potatoes are a multimillion crop in Manitoba. Last year there were 70,000 acres of production, making Manitoba Canada’s second-biggest producer behind Prince Edward Island. Manitoba processing potatoes averaged 340 bags (one bag weighs 100 pounds) an acre in 2013. (Average yields in the U.S. Pacific North West are double that, but some of their costs are higher.)

Manitoba growers aren’t alone, said Dale Lathim, president of Potato Marketing Association of North America. “They (processors) are trying to lower the price of the contracts pretty much in most areas in North America, but unfortunately growers really haven’t been having great years from a crop standpoint… so we don’t have a lot of money to give back to them,” Lathim said in an interview.

Source: manitobacooperator.ca