Slumping demand brought on by a diet craze has spoiled the market for a good potato crop.
“You could watch potato sales decline if you put a finger on the calendar indicating the day that the study came out validating the Atkins diet. Atkins has had a huge impact,” said Manitoba Agriculture potato specialist Bill Moons.
The popular high protein, low carbohydrate diet and its spinoffs have curbed the demand for spuds, as has a growing consumer avoidance of transfatty acids in french fries.
“Potato consumption per capita is on the decline,” said Moons.
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And so are potato prices.
“We were on a conference call yesterday and the basic comment from coast to coast was we’re long on product and short on prices,” he said in a Jan. 8 interview.
According to the latest Statistics Canada numbers, the potato price index dropped 20.9 percent between September and October, which was the worst decline of any crop that the agency tracked last fall.
Adding to the demand problems is what Statistics Canada has termed “a record potato crop” hitting the market.
Moons said Manitoba’s three french fry processing companies are sitting on about one million bags, or 50,000 tonnes, of surplus product.
An estimated 1,000 acres of Manitoba spuds were disked under this fall because there was no place to store them.
“That’s a pretty good indication that yields were well above average,” said Moons.
The immediate price impact of the overproduction situation will be shouldered by table potato producers, said Vern Warkentin, executive director of Potato Growers of Alberta. That’s because spuds for the processing industry are primarily grown under contracts signed in the spring.
He said that despite an abundance of supply, sales to packers and processors have been painfully slow.
“That tells me there is less demand in the stores for the product. Customers aren’t buying it as readily. Or the wholesalers are buying their potatoes somewhere else.”
Warkentin thinks buyers may be filling orders with cheap product from the United States that flows into Canada unimpeded as long as the spuds are washed and graded.
“These guys are bringing it up and maybe that’s why the demand for local potatoes hasn’t been as high as it might have been,” said Warkentin.
Gerald Gross, general manager of Lucky Lake, Sask.’s Agristar Produce Sask. Ltd. (formerly Pak-Wel Produce Ltd.), said the strengthening Canadian dollar has made U.S. product more attractive.
“It’s ugly competitive right now,” said Gross.
“There was a good crop here and everywhere and prices are falling significantly.”
In particular there is an abundance of small spuds suitable for the table potato industry.
“The ones that are available for consumers to buy and take home to peel and boil are in larger supplies.”
Dave Whitmore, vice-president of sales for Manitoba’s Peak of the Market, said there’s not much doubt the industry has overproduced.
“Usually you have one or two areas that have a little bit of a catastrophe. This year everybody seemed to have a pretty good crop.”
But the spuds aren’t moving off the farm because buyers are withholding purchases to see if prices fall even further.
“It’s quiet. People are waiting to see what’s going to happen,” said Whitmore.
