DRESDEN, Ont. — Fresh potato production is unprofitable east of the Manitoba border.
The reduced Canadian supply hasn’t helped the situation, but neither has the decline in Ontario acres.
“On the fresh side, if they’re not losing money in Ontario they’re struggling,” said Glen Squirrell, chair of the Ontario Potato Board.
“Our productivity is going up, consumption is going down. Things are not meeting in the middle any more.”
Kevin McIssac, general manager of United Potato Growers of Canada, said concentration within Canada’s retail trade is a concern. The laws of supply and demand are not kicking in, he added.
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“Growers in all four provinces in Eastern Canada would like to see the price higher…. We have few buyers left in the market. There are three major buyers, and maybe you have as many as 200 sellers,” McIssac said.
“Our March holdings in Canada were down by six percent compared to a year ago. There is not an issue with supply.”
Approximately 350,000 acres of potatoes are produced annually in Canada.
Prince Edward Island is the in-dustry leader with nearly 90,000 acres last year. The other major producers in Eastern Canada are New Brunswick with 48,000, Quebec with 42,000 and Ontario with 34,000 acres.
Manitoba and Alberta are both major producers with 67,000 and 53,500 acres, respectively.
McIssac said there are distinct differences between the western and eastern production.
Western Canada is a net importer of fresh potatoes, which helps hold up prices. As well, Manitoba has a single desk sales system, which McIssac said has served its growers well.
Ontario is also a net importer of fresh potatoes, but it’s a highly competitive market with multiple suppliers.
Squirrell said 50 percent of Ontario production goes to the processing sector ,where grower profitability is adequate. The rest goes to the fresh market, where Ontario production meets 60 percent of demand.
The acreage in Ontario has actually fallen, according to Statistics Canada. Almost 40,000 acres were grown in 2012.
“Ontario growers have done their part in reducing their supply,” he said.
“It’s a complicated scenario. The bottom line is, the price should be higher. There is room for movement upwards if we can somehow get it.”
Squirrell said the Ontario potato board has marketing powers for fresh potatoes but doesn’t attempt to enforce them.
He said growers feel obligated to lower their prices to protect their market.
Instead, it establishes a recommended price, which is currently set at $2.25 for 10 pounds.
He cited a recent grocery flyer that priced 10-pound bags at $1.69. He suspects the growers’ share is likely $1.40.
“The prices are just awful. We’re getting our lunches ate by outside competition.”
Trevor Downey, a grower-packer, also said the price is too low.
“We base the Ontario price for what other provinces can land their potatoes here for,” he said.
“Potatoes move in big volumes as features…. Sure, there’s a recommended price but when they go on feature, you have to negotiate with your retailers.”
