Potato supply | Demand for potatoes from large processors has forced P.E.I.’s Mid-Isle Farms to contract acres
ALBANY, P.E.I. — Cavernous storage buildings stood open earlier this month awaiting the millions of pounds of potatoes that Prince Edward Island farmers would soon deliver.
Harvest usually happens in September, but a cold spring delayed seeding and pushed harvest to October.
Staff at Mid-Isle Farms expect to receive and process 40 million pounds, said sales representative and spokesperson Josh Gill.
“Three years ago we put 60 million lb. through here,” he said. “Last year, 45 million lb. We’ll be lucky to get 40 million through, probably.”
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Competition is strong, and hot dry summers the last couple of years have affected production.
Processors use 60 percent of the crop, 30 percent goes to the fresh market and 10 percent is for seed.
Gill said Mid-Isle might benefit from the closure of the McCain Foods french fry processing plant at the end of this month. The company announced in early August that it will close the facility at Borden-Carleton but leave its fresh pack plant in Summerside open.
“It’s a terrible thing for the industry as a whole, but for us it will probably help because we’ll gain some more supply,” Gill said.
McCain contracted with 23 growers, but only eight exclusively supplied the company.
Mid-Isle was formed in 1982 by seven growers in the region who saw the need for a potato wash and pack plant. The plant opened in April 1983 and has long-term storage for 32 million lb.
Five of the seven families still grow potatoes and supply one-third of the plant’s raw product in a typical year, Gill said.
Mid-Isle potatoes are sold to Sobey’s in Atlantic Canada and Quebec, as well as customers in Massachusetts, New Jersey, Pennsylvania and other northeastern states.
The company processes all varieties, but Gill said up to 80 percent are russets.
It employs 10 people year-round and up to 40 at full production.
Gill said the company traditionally has bought from smaller growers who didn’t have contracts with the bigger players, such as McCain and Cavendish Farms. However, the smaller growers are disappearing, which makes the future uncertain.
The larger growers are pushing for irrigation from deep water wells — a contentious issue itself — but the smaller growers can’t afford the equipment, he said. Some of these farmers have fields of five to 10 acres, and irrigation is just not possible, he added.
Other farmers are working together to supply the volumes processors want. Gill said Mid-Isle could have trouble finding enough potatoes if these arrangements become too big.
“Typically the fresh market has never ever contracted, and now we have to start doing that or we’re not going to be in business,” he said.
A run of 400,000 lb. is a big day at Mid-Isle, but at Cavendish it’s four million lb., he said.
Gill also said it can be tough on growers when processors start pushing too much on the market.
Last year, the company paid growers $11 per hundredweight for potatoes smaller than eight ounces and $15 per cwt. for potatoes larger than that. This year Gill has been offering $9 but said that is unrealistic when he hears what others are paying.
“Quebec is selling tens (10 lb. bags) into the wholesale market right now at $1.20,” he said.
“For me, freight to Quebec is 30 cents a 10 to Quebec, so that puts me 90 cents here, and for us to bag and pack them you need at least five cents a lb. so it doesn’t leave much for the grower.”
It costs about $3,000 per acre to plant potatoes. In 2013, the average yield was 281 cwt. per acre, requiring a price of at least $10.67 per cwt. to break even.
Gill said the company paid growers far more than other places in North America did last year because of tight supply and so much competition.
“We were paying the grower a lot more than the market would bear, but we needed to in order to make it work for us,” he said.
