[deck]The number of potatoes in storage is close to what it was last year at this time in the East, but it’s up in the West, primarily due to an increase in process potato holdings.[/deck]
March Numbers for Canada’s storage holdings from the United Potato Growers of Canada are showing an increase from the same period in 2013.
“In the East it’s basically the same as it was a year ago, and in the West it’s up significantly, almost 10 per cent,” says Kevin MacIsaac, general manager of UPGC. “That’s related to above-average yields to start with, in Manitoba and certainly in Alberta.”
MacIsaac points to movement as another factor. The fact that some Western processing plants temporarily shut down over the holiday season “probably slowed down the processing a little bit,” he says.
It’s in the processing category where you’ll find the majority of extra potatoes in Western Canada, MacIsaac says. “Some of those potatoes are in addition to contract volumes that growers have, so they’ll need to find a home.”
MacIsaac doesn’t think this will be an issue, “but it will mean that the processors will be able to run longer on Canadian potatoes than they did last year for example, or in previous years where they had to bring potatoes in from the U.S. That’ll mean a longer frying season, I believe.”
The pace of potato shipments has generally been good across Canada.
“Movement overall in the country is better than a year ago, and it’s probably one of our highest movements, I would say, in about four years,” says MacIsaac. “Normally, right after Christmas it tends to slow down and this year it seemed to keep moving into January, so that’s good. It was a good month.”
MacIsaac says this development wasn’t expected. “It surprised us,” he says. “We expected it to slow down a little bit, but it didn’t. It just seems to be that demand is there for the product. And of course, when we started out in the season, the pipeline was not full, so that’s helped. You’re speeding into a vacuum so if it’s empty to start with, you tend to have more momentum longer through the year.”
While there are some areas of the U.S. where pricing could be higher, the pricing picture in Canada is generally good, MacIsaac says, particularly on the fresh side.
“The long range expectation now is that, by the way movement has gone, there could actually be a little bit of a hockey stick, which means that market demand exceeds the supply at the end of the season,” he says. “That’s what some of the people who are knowledgeable in the business are saying could happen.”
MacIsaac says that could result in a similar situation to what happened last year, when prices went up substantially at the end of the season.
The United States exported 10.16 million hundredweight of fresh potatoes in 2013, a 7.2 per cent increase from 2012 and the largest export figure in North American Potato Market News records that date back to 1991. According to NAPMN publisher Bruce Huffaker, Canada took 95.4 per cent of the extra potatoes shipped in 2013, and 56.5 of all the fresh potatoes the U.S. exported last year. In 2012, Canada’s share of this U.S. export market was only 53.7 per cent.
In February, fresh potato shipments in the United States were down two per cent, or 128,000 hundredweight, from the same period in 2013, says Huffaker, adding that a 166,000-hundredweight drop in Idaho shipments is responsible for the entire decline.
During 2013, the global trade in potato flakes fell 4.3 per cent short of the 2012 pace. According to Huffaker, the major factor in this decline was a drop in United States imports of potato flakes from the European Union. The United States remains the world’s second largest potato flake importer, in spite of a 36.4 per cent drop in its 2013 imports.
Canada exported 17.4 million pounds of potato flakes in 2013, says Huffaker, with almost 85 per cent of this product going to the United States.
The European Union and the US dominate the global market for potato flakes. More than 99 per cent of all international trade in potato flakes originates from those two regions, Huffaker reports. European sales have grown rapidly since 2002, while U.S. exports have risen more slowly.