Reuters — Canadian farmers are cashing in on the highest vegetable prices in years, helped by the country’s weak currency and soaring costs of U.S. imports that have made them unexpected winners in a bearish commodity world.
Soft wheat and canola prices may diminish Canadian farm incomes by nine per cent this year. But it is the best of times for carrot and beet growers, part of a niche industry best known for stocking farmers’ markets.
“Per acre, there’s nothing quite like it right now,” said Sam Hofer, who grows carrots at Dinsmore, Sask., about 120 km southwest of Saskatoon. “You can make good pocket money off 50 acres of land.”
At Emile Marquette’s farm near Perigord, Sask., about 170 km northwest of Yorkton, his 20 acres of beets may bring 10 times more net profit per acre than canola. That is due to beets’ higher output per acre as well as skyrocketing prices.
The year ahead looks to have “huge potential,” Marquette said.
Fresh vegetable and fruit prices jumped 18 and 13 per cent respectively in January year over year, according to Statistics Canada.
The cost of imported U.S. produce has spiked as the Canadian dollar, now trading around US74 cents, fell 16 per cent last year. Excessive rain in some U.S. regions has added costs.
Marquette is part of a grower group that sells vegetables to Saskatchewan-based Federated Co-operatives. The growers and co-op set price increases for 2016 of five to 10 per cent on local produce that already fetches a premium.
It is a modest top-up, given store prices, but Marquette said farmers want to nurture demand.
Marquette is expanding beet plantings by one-third, or five acres, claiming more of his canola field.
Vegetable plantings in Saskatchewan may grow by up to 10 per cent this year, said Bob Purton, president of Saskatchewan Vegetable Growers’ Association.
Purton sells his tomatoes and cucumbers to farmers’ markets and expects the best prices of his 15 years growing vegetables.
In Alberta, carrots’ value topped $5.4 million last year, the highest since 1997.
In Ontario, demand should increase for Canadian apples, peaches and berries from retailers including Loblaw, Sobeys, Walmart and Metro, said John Kelly, executive vice-president of the Ontario Fruit and Vegetable Growers Association.
The low Canadian dollar may also spur fruit exports to the U.S., he said.
Federated Co-op has steadily bought more from Saskatchewan farmers in recent years. But the dollar’s slump has added to the urgency, said Mike Furi, manager of procurement and pricing at Federated’s subsidiary, The Grocery People.
Canada’s second-largest grocery chain Sobeys said it is also buying more from Canadian farmers. Sobeys is hiring four “local developers” in Alberta and British Columbia, whose mission is to find local farmers and vendors.
High grocery prices have ebbed, but another shock may be in store, Furi said.
Excessive rains and fluctuating temperatures in California and Florida may tighten supplies of celery, cauliflower and cabbage in March and April, spurring more demand for Canadian produce, Furi said.
“As much as they can grow, we can take.”
— Rod Nickel and Nia Williams are Reuters correspondents based in Winnipeg and Calgary respectively.