[deck]Potato acreage across Canada is expected to be up this year, with yields to match.[/deck]
Statistics Canada’s potato production estimates for 2012 report a three per cent acreage increase over 2011 plantings. Leading the increase in planted acres are processing potatoes, thanks to increases in processing contracts across most provinces, although fresh potato acres are also expected to be up slightly. Shortage may not be a word that’s used much this year as potato growers across Canada are preparing for a bumper crop.
Yields have been trending below average for the past couple of years, which has created some supply shortages across North America. Last year’s market was so under-served that some potato sheds on Prince Edward Island shut down early due to the lack of raw product, but that has also kept prices strong. “When you are under-serving the market, the prices are strong and there is more acreage in response to that,” says Gary Linkletter, chair of the Prince Edward Island Potato Board. “This year looks like it may be a good yield year across North America, and if that continues we will have a good supply here.”
A return to average or above-average yields in most North American growing regions, none of which have had any major weather-related issues to date this year, could, along with increased acres, create a surplus supply. And that has some sectors of the industry more worried than others.
Growers of processing potatoes are not expecting potato volumes to be an issue in terms of their price structure. Most contracts for processing potatoes have already been signed and price increases have ranged in the seven to nine per cent range across most provinces. Fresh market growers are not as optimistic, with consumption of table potatoes down and prices much more reliant on fluctuations in the market caused by any imbalance in supply and demand.
Saskatchewan growers, who produce mainly for the fresh and seed markets, are keeping a close eye on trends south of the border, where stocks of old crop potatoes still need to be sold as an earlier-than-expected new crop is reaching the marketplace. “What we are seeing already from Idaho is much earlier crops than normal and the prices aren’t holding,” says Kirk Flaman, president of the Saskatchewan Seed Potato Growers Association. As a result, acres in Saskatchewan will be fairly stable for this year as growers try to compensate. “We know if we over-produce we don’t get paid very well, so everyone is trying to keep the price up and trying to match up supply with demand,” says Flaman.
There are differences between the situation in the United States and Canada, however, which some industry experts feel will insulate Canadian growers from the same market-driven forces. “The main difference we see between U.S. and Canada today is we are not dealing with a hangover of old crop potatoes,” says Kevin McIsaac, general manager of United Potato Growers of Canada. “In Canada our old crop will be cleaned up by the time the new crop comes along, which will be good for us in terms of keeping prices stable.”
Overall, there is a feeling of optimism amongst growers this year. Prices are holding, contracts are up and the crop is off to a good start.
Thanks to increases in contracts for processing potatoes, acreage in Manitoba increased by 4.1 per cent to 76,000 acres. Prices for those contracts have increased by around eight per cent.
The focus for Manitoba growers this year is on quality, says Garry Sloik, manager of Keystone Potato Producers. “I think it’s very important that growers recognize that across North America there is good production and that we make every effort to ensure that we have good quality,” he says. “Good quality always sells.”
Prince Edward Island
Acres on Prince Edward Island also increased by 4.1 per cent to 89,500 acres this year, encouraged by profitability and increases for processing contracts.
Crop development is at a normal stage, but the dry, warm conditions early on have allowed for strong emergence and decreased the threat of fusarium and other diseases.
Gary Linkletter, chair of the P.E.I. Potato Board, cautions growers not to overreact to the possibility of a supply glut. “As an industry, we need to keep remembering the five-year pattern, not the one-year pattern,” says Linkletter. “We are all partners in this industry and farmers need to realize that we set the price of potatoes as much as anyone else.”
Alberta has also seen increases in processing potato contracts that have pushed acres up to 55,700 acres. Spring planting was early and conditions were ideal, with 90 per cent of the crop in before the first spring rains arrived.
“We are seeing a little more contracted by the processors than they would need in a normal year due to low inventory of finished goods, but we are optimistic that we will continue to see a little bit of growth in the industry and that we won’t get any pullback in 2013,” says Edzo Kok, executive director at Potato Growers of Alberta.
Potato acres remain fairly stable in Saskatchewan and growers are conscious of the need to not over-produce to maintain price levels that could come under pressure from a large North American crop.
Wet weather has raised fears that conditions could favour the development of late blight, already present in B.C.
Ontario potato acreage increased a fair amount to 39,800 acres. Conditions during the latter part of June and early July were very dry with several periods of extreme heat. As a result, an unusually early crop is now normal and yields may be less than normal.
Processing volumes contracted have increased slightly, but growers don’t expect any shortages on the fresh supply end from last year to have much effect on growers this year. “Our fresh market producers have their usual customers and they were aware there would be a shortage earlier in the year and sourced more from other areas,” says Don Brubacher, general manager of the Ontario Potato Board. “It just meant that table stock suppliers stocks were cleaned up a bit earlier than normal.”
Due to increases of about 15 per cent in volume for processing potato contracts across New Brunswick, some growers have shifted to processing potatoes from fresh potatoes, which has meant a corresponding increase in overall acres of around 5 per cent to 53,000 acres.
Although the crop is not as advanced in development as western provinces, Joe Brennan, chair of Potatoes New Brunswick, says the mood among growers is fairly positive. “The volume was up substantially and the price was up around nine to 10 per cent.” Brennan believes that if the weather dries up, growers can catch up with their field operations and end with a decent crop this year.
Early acreage estimates, based on 2011 figures for B.C., are 5,354 acres of table potatoes and 1,070 acres of seed potatoes.
Weather remains the main risk factor for growers in B.C. Conditions this spring, although less than perfect, have allowed for normal crop development.
B.C. growers produce only 60 per cent of the table potatoes demand in the province and need to maintain stable crop yields that can be marketed profitably. Prices generally follow the price of Columbia Valley potatoes in the Vancouver market, which are currently low and causing concern for B.C. growers. “Reports suggest that U.S. growers are planting more acres this year than last year. Should this year’s U.S. potato yield be average or better, supply is likely to exceed demand with consequent price erosion,” says Jim Shiell, market analyst for the B.C. Vegetable Marketing Commission.