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Potato packer grows from ashes of 1999

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Published: July 11, 2002

LUCKY LAKE, Sask. – Three years after the collapse of Saskatchewan’s

potato industry, its largest packer is pushing for a modest expansion

in acreage.

Pak-Wel Produce Ltd. says business is going so well at its Saskatchewan

plant that it’s time for the province’s producers to consider growing

more spuds.

“The demand for potatoes from this facility far exceeds our ability at

this point in time to get local growers to provide potatoes,” said

Gerald Gross, Pak-Wel’s manager of potato buying.

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The Lucky Lake plant was one of the assets of the failed Lake

Diefenbaker Potato Corp., which went bankrupt in 1999. It was purchased

by Pak-Wel’s parent company, Agristar Incorporated, later that year.

Agristar also owns a packing plant and a potato granules plant in

Vauxhall, Alta., and a fresh cut fruit and vegetable business in

Calgary.

Pak-Wel recently hosted an open house to showcase its packing plant and

the newly acquired storage facility it bought from the provincial

government earlier this year.

One goal of the event was to help heal old wounds that exist among

local growers involved in the unsuccessful LDPC endeavour.

“Even though the first venture failed, in some small way those people

were successful because the plant is in Lucky Lake and it is operating

and it is creating a lot of economic development activity,” Gross said.

“Some twist of fate caused it to be here and operating and it is

certainly helping the town of Lucky Lake and the area around Lake

Diefenbaker.”

The plant employs 32 full-time workers. Another 22 teenagers have

part-time jobs at the Pak-Wel facility. But Gross is most proud that

the plant has been cleaning, grading, sizing and packing table potatoes

year-round since it opened in 1999.

“The big thing was to run 12 months of the year.”

Most Canadian potato packers shut down for four months between May and

August when local supplies are non-existent.

Pak-Wel was determined to continue operating during the summer to

maintain its workforce, keep trucking relationships in place and help

pay its sizable overhead costs.

“The answer was to aggressively import potatoes from the United States

and that’s what we did,” Gross said.

But the cost of shipping those spuds to Canada is high and it is hard

to ensure the proper quality, so Pak-Wel would like to buy more of its

supply from local producers.

The company contracted about 1,200 acres of production this year and

wants to increase that by another 800 acres. Seventy-five percent of

the potatoes that Pak-Wel buys is contracted. The rest are seed

potatoes that don’t meet certification standards or table potatoes

grown on speculation.

Last year the company packaged about 16,000 tonnes of product – 11,000

tonnes from Saskatchewan producers. Gross said Pak-Wel would like to

increase production to 30,000 tonnes and wants 95 percent of it to be

grown in Canada.

Growers are embracing expansion, and seem to have put the 1998 debacle

behind them. That was the year LDPC tripled its potato acreage, shortly

before big problems surfaced in the provincial potato industry.

Gross assures growers that will not happen again because Pak-Wel is

matching sales contracts to purchase contracts.

“We won’t get in a long position where all of the sudden people know

that you’ve got thousands of tonnes of potatoes that you can’t sell. It

won’t happen.”

Ken Plummer grows potatoes southwest of Saskatoon. His acreage is all

contracted with Pak-Wel, a company he credits with resuscitating the

industry.

“If they weren’t here we wouldn’t be in the potato business,” said

Plummer.

Pak-Wel’s ample storage capabilities allow Plummer to deliver potatoes

to the plant, avoiding the expense of building his own storage

facilities.

He thinks there is an appetite for expansion in the potato industry. He

recently doubled his acreage and has his eyes on another piece of good

potato land for further expansion.

But growers haven’t forgotten what happened in 1998 when acreage shot

up and the industry crumbled. Plummer said there will be cautious

expansion.

“It will be a natural growth that is sustainable, rather than a pushed

growth that collapsed.”

About the author

Sean Pratt

Sean Pratt

Reporter/Analyst

Sean Pratt has been working at The Western Producer since 1993 after graduating from the University of Regina’s School of Journalism. Sean also has a Bachelor of Commerce degree from the University of Saskatchewan and worked in a bank for a few years before switching careers. Sean primarily writes markets and policy stories about the grain industry and has attended more than 100 conferences over the past three decades. He has received awards from the Canadian Farm Writers Federation, North American Agricultural Journalists and the American Agricultural Editors Association.

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