Potato growers with surplus production this year could find themselves in the driver’s seat.
Canadian production is down from last year and major processors are scouting the countryside to shore up their supplies.
“Anyone who has a decent crop with half decent quality is going to see a fairly strong market,” said Paul Sereda, assistant director of Agriculture Canada’s horticulture section.
“Those with product are going to see a good year. Those without are going to be in trouble.”
Prince Edward Island, Canada’s leading potato producer, saw its total production fall by almost 40 percent this year because of drought.
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Alberta was the only province in Canada that posted gains in its overall potato production. Production there rose to 774,000 tonnes.
In Manitoba, total production fell to 704,900 tonnes, a decline of 16 percent from a year ago.
Roughly half of the potatoes grown in Canada are for processors who convert spuds into french fries, hash browns and other processed foods.
Major processors like McCain Foods, Lamb Weston and Cavendish Farms contract with growers early in the year to gain an assurance of supply at a set price.
Growers whose entire production will go toward satisfying their contracts will have little opportunity to take advantage of the crimped supply of potatoes in North America this year.
However, for those with surplus potatoes, there’s an opportunity to hunt for higher prices. Sereda said it’s likely that prices in the open market will continue to improve between now and next spring.
It’s going to be an interesting year worldwide, he said, noting that production in Europe is down slightly while production in the United States also fell.
The first estimate of U.S. fall-season potato production is 18.18 million tonnes, down 14 percent from last year and the lowest since the fall of 1993.
The reduced fall-season crop, combined with smaller harvests this past winter, spring and summer puts total U.S. production for 2001 at 20.04 million tonnes, 14 percent below the record 23.32 million tonnes produced in 2000.
Such a large decline in production will put strong upward pressure on grower prices for the 2001-02 marketing season, the U.S. Department of Agriculture predicted in a mid-November summary.
“If you’ve got potatoes this year, it’s a good year to have them,” said Charles Plummer, an agricultural economist with the USDA’s economic research service.
Garry Sloik, secretary manager of the Keystone Vegetable Producers Association in Manitoba, said processors there are offering an additional $2 a cwt. above contract prices to growers with surplus to sell. Growers enjoying a surplus might also tap the U.S. market, depending on their proximity to processors there.
“Most of them aren’t in a hurry, because they realize the market could strengthen later on,” Sloik said.
However, in the case of growers strapped for supply, it will be hard to read good news into the 2001 harvest.
In P.E.I., many potato producers will be short on their contracts this year because of the drought. Last year, they were hammered by the effects of a U.S. trade embargo against their product following an incident of potato wart on the island.
“If it weren’t for bad luck, I don’t know what luck we’d have,” said Ivan Noonan, general manager of the P.E.I. Potato Board, which represents 650 growers in the province.
“When you only have half the crop, you need twice the price.”
