Spud Smart investigates Statistics Canada’s production projections across the country.
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.
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