Alberta potato farmers could see growth during the next five years similar to what Manitoba growers experienced in the past decade.
Since 1988, Manitoba’s potato production has increased by more than 230 percent, said Douglas Kuhl, a grower with Southern Manitoba Potato Co. Ltd.
Two french fry processors, McCain and Lamb-Weston, are building plants in southern Alberta.
Kuhl told a recent outlook conference sponsored by the University of Guelph’s George Morris Centre in Ontario and Bank of Montreal that Manitoba’s production could grow again.
If Lamb-Weston decides to build another plant in North America, the company said Manitoba would be in the running, said Kuhl.
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Existing Manitoba processors McCain and Midwest Foods will likely look at expanding too, he said.
In the next five years, Kuhl said Manitoba growers may well be producing 10 to 20 percent more potatoes.
This could lead to another processor moving in to the province, one that would use “all the dribs and drabs” of the crop to make dehydrated flakes and granules, said Kuhl.
Compared to recent returns from other crops, the average 600-acre potato operation in Manitoba has been “reasonably profitable,” said Kuhl.
Most production is contracted before planting. Revenues tend to fall between $1,500 to $2,000 per acre.
But margins, though reliable, are not large. Growing potatoes is expensive.
Kuhl said suitable land costs about $1,500 per acre. Some land around Winkler, Man., has recently sold for up to $3,000 per acre, he said.
Total capital costs add up to around $5,000 per acre for equipment that’s not all new, said Kuhl. A 600-acre operation would be a $4 million investment, he said.
Planting, harvesting, storing and shipping potatoes costs about $1,500 per acre, he added.
Potato operations tend to have smaller variations between good and bad years than other farms.
Major fluctuations in revenue tend to come from yields, not price.
Manitoba has some of the lowest costs for producing potatoes in North America, said Kuhl.
Farmers supplement good rainfall with irrigation, rather than paying for water for the whole crop.
“The harsh, cold winters kills off a lot of things,” he said. “That means we have less need for expensive pesticides.”
On his farm, Kuhl sprays for insects twice during the summer, while many U.S. growers spray every week.
In some parts of the U.S., farmers pay $300 to $400 (U.S.) per acre to fumigate the soil before planting.
Most Manitoba potatoes and french fries are shipped outside the province. Transportation costs add up, said Kuhl.
“We’re in the wrong place, but we’re ideally in the wrong place,” he said, explaining the central location means fries can be shipped to the East or West Coast of the United States.
“From Manitoba, we can take advantage of whatever market is hot.”
About 80 percent of Manitoba’s production goes to french fry plants.
Kuhl’s company has about 2,000 acres of potatoes, with half of them sold to the table market, and the other half going for potato chips and seed.
