Potato growers in Manitoba, New Brunswick and Prince Edward Island will need to accept lower prices for their spuds, says a McCain Foods spokesperson.
If they don’t, production will shift to the Pacific Northwest.
A $1.50 to $2 per hundredweight price gap now exists between Washington state and Manitoba, New Brunswick and P.E.I., said Calla Farn.
Fewer potatoes will be grown in Canada if the disparity is not ad-dressed, she added.
“We are trying to ensure that our growers understand the urgent need to narrow the gap between the price of raw potatoes in parts of the U.S. and prices in Canada,” Farn said.
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“We’ve already seen volume reductions in Canada as our customers demand product from some of our less costly centres. So if we don’t deal with the price gap we’re going to continue to lose Canadian volume to the lower cost region.”
Canadian growers planted 380,000 acres of potatoes in 2008. Production fell to 360,500 acres in 2011 before rebounding to 373,400 acres last year, according to Statistics Canada.
Farn would not comment on McCain’s ongoing negotiations with Canadian growers for 2013 production contracts, but the company has proposed a five percent price de-crease to producers in Manitoba, New Brunswick and P.E.I.
Potato fields in Washington typically yield 600 cwt. per acre, double Manitoba’s yield, which is why Washington growers can be profitable at lower prices. Nonetheless, the price discrepancy isn’t sustainable in the long run, she said.
“It varies by region, but potato prices in the Pacific Northwest are at least $1.50 to $2 per cwt. less than elsewhere in North America. That’s a huge difference when you consider that the cost of raw potatoes is our biggest input cost,” she said.
“We absolutely have to become more cost competitive if we want to keep volume here in Canada.”
McCain Foods will pay Alberta potato growers 1.5 to two percent more in 2013. Farn said Alberta yields are higher than other parts of Canada, which makes its growers more competitive.
