Potato Growers Make Slight Gains In 2011 Contracts

Manitoba potato growers have made up a little ground in their 2011 contracts with processors, but still haven’t recovered from losses suffered last year.

Growers voted April 20 to accept an offer from McCain Foods for an eight per cent price increase for 2011, said Gary Sloik, Keystone Potato Processors Association general manager.

Average prices for processing potatoes this year are around $10/cwt. McCain also raised its contracted acreage this year by five per cent, Sloik said.

But the increase does not make up for a 15 per cent price cut and a 12.5 per cent cut in volume which producers had to accept from McCain last year, he added.

At the same time, Simplot Canada has reduced its 2011 contracted acreage by seven per cent after holding volumes steady last year.

As a result, Manitoba’s total potato acreage will rise only slightly to 74,000 acres from 71,000 acres in 2010, Sloik said.

He said growers are relieved to have signed agreements but wish they could have been reached earlier this spring.

“This is too late to be getting them settled so that people can make good business decisions early in the year.”

The situation for growers is a bit better than last year when McCain made sweeping cuts to its processing potato contracts because of a sharp downturn in french fry demand. The company also eliminated a production shift in each of its plants at Portage la Prairie, Borden, Prince Edward Island and Coaldale, Alberta.

The improvement with McCain is tempered by the acreage reduction at Simplot.

Sloik said the North Amer ican recession and a “mature market” are depressing french fry consumption and limiting potato production.

People are eating out less and restaurants are serving smaller portions. As a result, “the North American market is somewhat flat.”

Manitoba growers expect to plant 57,000 acres of processing potatoes, 10,000 acres of table potatoes and 7,000 acres of seed potatoes this year.

This is a far cry from the peak year of 2003 when growers planted a total of 103,000 acres of potatoes.

Manitoba had nearly 100 processing potato farmers as recently as five years ago. This year KPPA negotiates on behalf of only 80 growers, Sloik said.

“It’s going to be some time before it comes back to the levels we had at one time.”

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