After disappointing seasons in 2010 and 2011, the Canadian potato industry was back on track last year in terms of annual production. Statistics Canada’s crop figures show a production increase of 9.4 per cent for 2012 from the previous year.
As a result, there’s been a corresponding increase in the number of potatoes in storage across the country. Supply estimates for March 1 released by the United Potato Growers of Canada show a 17.9 per cent rise in Canadian storage holdings from the same period in 2012.
Kevin MacIsaac, general manager of UPGC, says the increases are a little misleading. Yes, total production numbers and supply levels are up, but that’s mostly the result of poor potato crops in previous years.
“Our holdings are higher than they were this time last year, but again we have to remember that last year  was a year in most areas they were really below their average production numbers,” he says. “So we would be comparing a year in this past growing season to a year that was below average, so it makes our numbers look a little higher than what the reality is.”
According to MacIsaac, Canadian potato production in 2012 was “a return to average, or slightly above.”
“It’s going to take a while to work our way through all this crop. … Most areas would indicate that movement has not been extremely fast compared to other years.” Kevin MacIsaac, general manager of UPGC
With respect to the storage holdings, MacIsaac believes “it’s going to take a while to work our way through all this crop. … Most areas would indicate that movement has not been extremely fast compared to other years.”
While production and storage supply figures are up, MacIsaac says it’s a different story for potato prices.
MacIsaac has spent the best part of early 2013 criss-crossing Canada updating growers on market conditions as part of UPGC partner seminars held in different regions across the county. Spud Smart caught up with him during the recent UPGC stop in Portage la Prairie, Man.
MacIsaac maintains potato producers are still feeling the pricing pinch caused in part by last year’s bumper crop in the Pacific Northwest. In Idaho, for example, “they planted more [and] they had just an excellent growing season, a long growing season. They were able to plant early, and [there was] no frost to kill the crop off early, so they had a big crop,” he says. “That’s a real issue, because a huge number of acres of potatoes are grown in that state to begin with.”
85 cents less for 10-pound bag
MacIsaac says oversupply is one reason why a 10-pound bag of potatoes sells for as much as 85 cents less that it did a year ago. “Pricing is certainly reflective of supply and demand and we’ve seen pressure on prices,” he says. “More importantly, we don’t see prices moving upwards. It is disappointing when prices are below the cost of production.”
On the demand side, growers continue to grapple with a dramatic drop in potato consumption that’s taken place over the past 10 to 15 years, says MacIsaac. “In terms of the whole picture, we’re dealing with a major consumption issue, especially on the fresh side,” he says. Canadians ate an average of 42.7 kilograms of potatoes in 1997-—today, the average is 22.2 kilograms per person.
It’s going to take a while to work our way through all this crop. … Most areas would indicate that movement has not been extremely fast compared to other years.
- Kevin MacIsaac, general manager of UPGC
2012 Canadian Potato Production
|Province||Acres Harvested||Yield (cwt/ac)||Total Production (cwt)||Change|
Source: United Potato Growers of Canada
March 1, 2013: Canadian Potato Storage Holdings
Source: United Potato Growers of Canada
BRUCE HUFFAKER, market analyst and publisher of the North American Potato Market News, also spoke at the UPGC seminar in Manitoba. His message was similarly sombre.
According to Huffaker, a major issue potato growers are facing is a clash in trends—for various reasons, yields are trending up across North America, at the same time that demand for potatoes is trending downwards.
In addition, Canadian producers growing for the export market continue to feel the squeeze from a strong Canadian dollar, he says, adding there’s also increased competition from the United States, which is regaining its position as a net exporter of potatoes. Another interesting international development was noted by Huffaker—the European nation of Belgium appears to be capturing most of the growth in global demand for frozen potato products.