WINNIPEG/CALGARY (Reuters) — Canadian farmers are cashing in on the highest vegetable prices in years.
The rise in prices is helped by the country’s weak currency and soaring costs of U.S. imports that have made local producers unexpected winners in a bearish commodity world.
Lower wheat and canola prices may diminish Canadian farm incomes by nine percent this year, but it is the best of times for carrot and beet growers, part of a niche industry best-known for stocking farmers markets.
“Per acre, there’s nothing quite like it right now,” said Sam Hofer, who grows carrots at Dinsmore, Sask.
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“You can make good pocket money off 50 acres of land.”
At Emile Marquette’s farm near Perigord, Sask., his 20 acres of beets may bring 10 times more net profit per acre than canola. The high profits are the result of beets’ higher output per acre as well as sky-rocketing prices.
This year looks to have “huge potential,” Marquette said.
Fresh vegetable and fruit prices jumped 18 and 13 percent, respectively, in January year over year, according to Statistics Canada.
The cost of imported U.S. produce has spiked as the Canadian dollar fell 16 percent last year. Vegetable costs also rose as a result of crop damage from excessive rain in some U.S. regions.
Marquette is part of a grower group that sells vegetables to Federated Co-operatives Ltd., which has grocery stores across Western Canada.
The growers and the co-op set price increases for 2016 of five to 10 percent on local produce that already fetches a premium.
It is a modest increase, given store prices, but Marquette said farmers want to nurture demand.
He is expanding beet acres by one-third, or five acres, claiming more of his canola field.
Vegetable plantings in Saskatchewan may grow by up to 10 percent this year, said Bob Purton, president of the Saskatchewan Vegetable Growers’ Association.
Purton sells his tomatoes and cucumbers to farmers markets and expects the best prices of his 15 years growing vegetables.
In Alberta, carrots’ value topped $5.4 million last year, the highest since 1997.
In Ontario, demand should increase for Canadian apples, peaches and berries from retailers, said John Kelly, executive vice-president of the Ontario Fruit and Vegetable Growers Association.
The low Canadian dollar may also spur fruit exports to the United States, he said.
FCL has steadily bought more from Saskatchewan farmers in recent years, but the dollar’s slump has added to the urgency, said Mike Furi, manager of procurement and pricing at the co-op’s subsidiary, the Grocery People.
Sobeys said it is also buying more from Canadian farmers.
Canada’s second-largest grocery chain is hiring four “local developers” in Alberta and British Columbia, whose mission is to find local farmers and vendors.
High grocery prices have ebbed, but another shock may be in store, Furi said.
Excessive rain and fluctuating temperatures in California and Florida may tighten supplies of celery, cauliflower and cabbage in March and April, spurring more demand for Canadian produce, Furi said.
“As much as they can grow, we can take.”
