Thanks to increased awareness of market data by the United Potato Growers of Canada and provincial potato boards, Canadian growers have been steadily decreasing acreage over the last few years to get production in-line with markets. And this year was no exception.
The Canadian 2010 potato area has been estimated at 359,400 acres, down 3% from 2009. Manitoba showed the greatest decrease, down 12.9% to 70,000 acres, while Ontario showed the only real increase, up 4% to 38,500 acres.
Overall, the decline in Canadian acreage is not unexpected and Ray Keenan, chair of UPGC, says the stats are in-line with UPGC’s estimates. He says in recent years the goal hasn’t been to specifically reduce potato acreage, but to encourage producers to grow the quantity and varieties that the market requires and to do it at a level that keeps the industry sustainable. “We want to bring supply more closely in-line with demand for the benefit of all: growers, processors, retailers, and food service operators, and, ultimately, consumers,” he says.
As a result of the declines in production in recent years, Keenan feels supply is coming in-line with demand, but it still comes down to smart marketing. “This past year we didn’t feel our supplies were too high here in Canada and we should have been able to market the 2009 crop at a reasonable price. But, as growers, we did not pay enough attention to our ‘supply on hand’ numbers and pushed too hard early in the season,” he says. “Late in the marketing season, prices have rallied but we didn’t have the discipline or faith in the numbers to capture a better price earlier. The fact that the western U.S. had too many potatoes was also a factor, but we could have done a better job marketing our 2009 crop.”
At the end of the day, the acreage number is only one indictor of production. The other main factor is yield of which weather plays a major role and it’s already affecting this year’s crop. With excessive rains across the Prairies this spring, many growers didn’t get all of their fields seeded, and many will see decreased yields due to wet conditions.
The increase in FOB prices this summer indicates the market is indeed concerned about supply at this point. “We’re a few months from having the crop out of the ground, and so much depends on yield, but with the drop in acres planted both in Canada and the United States, and some potential problems in a few production areas, there is a very good chance that we will see improved prices this year,” says Keenan.
Highlights from Statistics Canada’s report include:
Prince Edward Island
This year’s potato acreage in Prince Edward Island is very similar to last year’s, coming in at 84,500 acres, slightly down from 85,000 acres in 2009. “We’ve seen major decreases in potato acreage in Prince Edward Island since it peaked at 113,000 acres in 1999,” explains Brenda Simmons, assistant general manager of the P.E.I Potato Board. “At 85,000 acres in 2009, we were down 28,000 acres or 25% in just over ten years. Island growers are now, for the most part, planting to meet known or fairly stable markets—whether for seed, tablestock, or processing.”
Simmons says open or “flex” acres are still a concern, but with the high cost of production per acre, and poor returns in 2009/10 on fresh market and for open processing potatoes, growers think hard before planting additional acres. “We experienced significant reductions in processing volume with one major processor this year, but other processors actually contracted additional volume in 2010. As a result, our overall contracted processing volume is up slightly,” says Simmons. “We’ve seen the USDA report, which estimates reduced 2010 fall crop acres south of the border, and we’re hopeful that North American yields and overall production will better match the demand in 2010/11.”
According to Statistics Canada, acres in New Brunswick are expected to be reduced by about 1,500 from last year’s 55,000 acres, bringing total acreage to 53,500.
“The reason for the decline is primarily due to a reduction in processing contract volume with McCain Foods—in the order of 20%,” says Joe Brennan, chairman of Potatoes New Brunswick. “In addition, some farmers exited the business due to financial issues and/or retirement.”
Ontario showed the only real boost in acres, going from 37,000 last year up to 38,500 this year, a 4% increase. According to Don Brubacher, general manager of the Ontario Potato Board, the 1,500-acre increase was expected and is due to, “an increase in potatoes grown for chips. Contracted quantities have increased for this end use.” However, Brubacher adds tablestock acres in Ontario are down slightly from last year.
Manitoba saw the biggest decrease in potato acres, own 9,000 acres or 12.9% from last year’s 79,000 acres. This drops Manitoba’s production to 70,000 acres, the lowest it’s been for many years.
“Acreage is down significantly with the cuts in processing contracts,” says Wayne Rempel, Manitoba’s representative for UPGC. “Also, there was an intent to plant more table potatoes but the excessive spring rains have taken out those acres.” Julie McNabb