News Industry Pandemic Fallout

Pandemic Fallout

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The COVID-19 pandemic has affected almost all areas of the Canadian potato industry and forced growers to rethink their planting plans.

In mid-March, the COVID-19 pandemic shutdown hit North America. Businesses shuttered and governments placed restrictions on everyday life. On potato farms across the country, farmers watched cautiously knowing business would be affected.

“Once they started shutting down all these businesses, like restaurants and those types of things, that’s when we started getting an idea that ‘hey, looks like there’s going to be an impact on food’,” Russ Van Boom, a seed potato grower at Northbank Potato Farm near Edmonton, Alta. says in a phone interview.

While shoppers rushed to buy potatoes and chips from grocery stores, french fries began to pile up in the freezers of processors across the country. The food service industry, including restaurants, accounts for around 70 per cent of french fry demand. Even with delivery and takeout still allowed, it still couldn’t cover the demand drop. It quickly became apparent planting plans were going to have to change.

“In Canada our growing season is a little bit later than the U.S. So, we still had opportunity” to reduce potato acres, Kevin MacIsaac, general manager of the United Potato Growers of Canada, explains in a phone interview. In parts of the United States, such as the Columbia Basin, almost 70 per cent of their acres were planted when then pandemic hit, “so the net result today is that some of those fields were being destroyed as the potatoes were emerging from the ground.”

It wasn’t just the processing industry which was seeing an effect. Seed growers had orders cancelled and farms which relied on temporary foreign workers scrambled to follow federal and provincial regulations to bring workers to their farms.

Piles of Fries

In January, as China announced the first cases of COVID-19, McCain Foods Ltd. had a meeting with senior leadership and started putting crisis plans in place. The food processing company operates plants around the world, including in China. As the virus spread through Europe in February and North America in March, the crisis plans spread with it.

“I don’t think we’ve had a single regional major manufacturer growing region that hasn’t been somehow impacted by this as it has slowly become such a major part of our lives,” Peter Dawe, chief strategy officer for McCain, says in a phone interview.

While business dropped off for McCain’s foodservice customers, it picked up for retail. Retail processing plants in Manitoba and New Brunswick had to increase production while McCain’s other plants in Alberta, New Brunswick and Manitoba had to take line downtime, cut shifts and lay off employees.

With freezer space at a premium before the pandemic, processors quickly reached their brink as sales dropped off. Some processing companies, such as Cavendish Farms, told growers to find alternative markets for 2019 crop, while others, like McCain, continued to purchase potatoes and sell them in alternative marketplaces, often at a loss. Some potatoes were given to food banks while others were sold into the dehydrated potato products market, and some went for livestock feed.

With the economy being “reopened, especially in the U.S., we’re beginning to call those workers back and are beginning to add processing time back to the lines,” Dawe says. However, demand will still be down over the next year and McCain has reduced its contract volumes by 15 to 20 per cent in Canada.

On Chad Berry’s processing potato farm near Glenboro, Man. the first month of the pandemic was scary. Berry had been planning on increasing his potato acreage this year to help supply J.R. Simplot’s recently expanded plant at Portage la Prairie, Man.

Potato seed sorting
Workers at Chad Berry’s farm near Glenboro, Man. cut potato seed to prepare for planting. Berry had been planning on increasing his acres this year but instead his acreage will be closer to years past. Photo: Chad Berry

“No one knew up till the start of planting what we were going to do,” Berry says in a phone interview. “Everyone was cautious and didn’t take any extra on then they had to.” His acreage this year is now closer to what he has planted in year’s past.

His potato shipments to Simplot were pushed back, however the plant is going to be able to take all of his spuds. This is causing extra stress as he has workers preparing and shipping potatoes instead of out in the fields planting.

“The pandemic’s slowed down movement on a lot of things. Everything’s going to be pushed back — our direct harvest is pushed back to the end of August,” Berry explains. “It’ll make harvest a lot more intense because we’re trying to do six weeks work in four weeks instead.”

Panic Stockpiling

As Canadians prepared to hunker down at home and flatten the curve, they flocked to grocery stores buying staple foods which would keep for longer periods of time — including fresh potatoes. At the start no one knew exactly what the new reality was and when they would be able to make it to a grocery store again.

Across Canada fresh potato sales skyrocketed and grocery stores found themselves sold out of spuds as shoppers stockpiled. Winnipeg, Man.-based Peak of the Market, which has operations in Manitoba and Alberta, recorded its largest sales ever for the month of March — the market co-operative has been operating for 78 years.

“We pretty much ran 24 hours a day for about two weeks to make sure that we supplied all the retailers the potatoes they needed,” Larry McIntosh, Peak of the Market CEO, says in a phone interview.

Employees in the packing plants were asked to volunteer to work extra shifts to fill retail demand and growers increased their potato deliveries to the plants. As processing potato sales dried up, Peak of the Market bought some Russet Burbanks which had been originally destined for processing.

In April, as shoppers settled into a regular shopping routine, sales returned to normal levels. Peak of the Market expects it will still have enough potatoes to almost last until harvest despite the sales pickup.

“Peak of the Market usually has Canadian potatoes year-round. And certainly, the rush for potatoes that consumers and retailers wanted stretched that a bit because we sold potatoes a little faster than planned,” McIntosh says. “We understand stores wanted potatoes on the shelves. So, we reacted and got them product. Now we’re slowing sales down a bit by reducing our exports to the United States.”

Seed Sales Drop

It was a complete 180 for seed sales. On Van Boom’s farm growers had been picking up their seed orders like normal — business had been actually increasing for him over the last few years as the french fry processing expansion had happened. There were worries this year there wouldn’t been enough seed to fill demand.

“And then all of the COVID thing unfolded and within a matter of a week or two, that’s when we started getting phone calls. ‘It looks like just hold off on that last load, looks like we’re not sure yet.’ And as it went on, those calls just kept on coming in,” Van Boom says.

Leftover potato seed
Northbank Potato Farm near Edmonton, Alta. is stuck with 15 to 20 per cent of its seed potatoes, after growers cancelled orders this spring. Photo: Russ Van Boom

For seed growers it wasn’t as simple as changing planting plans or sending extra spuds to food banks for use, they had already invested four to five years into these crops — growing and preparing the seed for sale this year.

“This is probably one of the toughest stories of the whole situation because the seed growers are really at the very bottom of the supply chain,” MacIsaac explains. “Unfortunately, the seed profile tends to be small, it tends to be stored at a cooler temperature, so it doesn’t have colour. And there’s just a lot of difficulties with getting that product converted to any other sectors of the industry. So, the loss is there for them.”

On Van Boom’s farm he is sitting on around 15 to 20 per cent of unsold seed. He has been searching for alternative markets such as dehydrated, but it looks like most of his seed, along with his Alberta counterparts, will be destroyed.

“It’s going to be a major setback,” Van Boom says. “You can’t really prepare for something like this, it’s incredibly difficult.”

It hasn’t been all doom and gloom on his farm though. Northbank Potato Farm also grows seed for fresh potato varieties, which he did not see any order cancellations with. But Van Boom will still be reducing acres overall this year.

“People still need to eat, so how will their diets change is the big question?” Van Boom says. “I don’t think there’s going to be a permanent 30 per cent reduction, like there is in some cases this year. But certainly, there’s going to be an impact.”

Scrambling for Workers

Spurr Brothers Farm in the Annapolis Valley in Nova Scotia was getting ready for the growing season as the pandemic hit North America. The fruit and vegetable farm was receiving seed potato orders, prepping for seeding and planning out pruning of its orchards when flights for their employees started getting cancelled.

Spurr Brothers sells fresh potatoes, fruit and other vegetables to Loblaws, local farmers markets, a market co-operative and other food services in Nova Scotia. During the growing season they employee around 50 people with 22 of them being temporary foreign workers from Mexico and Jamaica.

“We have some guys that have been coming to our farm for like 14 years now,” Katie Campbell with Spurr Brothers Farm, says in a phone interview. “These guys have developed quite a huge list of skills that you can’t just train somebody overnight with.”

Potato planting
Spurr Brothers Farm in the Annapolis Valley in Nova Scotia seeds it’s 2020 fresh potato crop. Photo: Katie Campbell

To stop the spread of COVID-19, Canada closed borders and embassies internationally. Originally temporary foreign workers were not going to be allowed in, but the government quickly changed its tune and decided to allow them as long as they completed 14-day quarantines upon arrival. In New Brunswick, the government didn’t allow temporary foreign workers to enter until the end of May.

Farms across Canada scrambled to prepare facilities for quarantine. Employees rushed to rebook flights and sort out paperwork, which was hindered by embassies and other offices being closed in their home countries. To help farms with costs, the federal government launched a program where they would pay $1,500 per employee to cover costs related to quarantine.

So far Campbell has been able to get 12 of her temporary foreign workers here. They are still waiting on six more who have struggled to complete the required paperwork and have their work visas approved due to closed offices in their home countries.

“Even in their countries as well, they would have different protocols in place too,” Campbell explains. “So, it has been a few more hiccups than normal for getting these guys here.”

Workers have arrived weeks behind schedule which has forced Spurr Brothers to revise their work plans and delay annual tasks such as pruning of all of their fruit trees. Overall though they’ve been able to make it through, but Campbell is worried about how long these protocols will last and what affect they will have on harvest.

“We’re trying to adapt as best as we can. Everything always has its effects to it. It’s just sometimes you don’t always know exactly how long term this will affect us,” Campbell says.

Pandemic Legacy

The recovery won’t just happen overnight, and the potato industry is wondering what the new “normal” will be.

French fries being made
French fries made at McCain Food’s processing plant in Coaldale, Alta. McCain has faced decreased french fry sales internationally as the pandemic has forced food service establishments to close. Photo: McCain Foods

French fry sales are rebounding faster than expected across North America as restaurants begin to reopen. At McCain they were able to find support from their retail segment which saw strong sales throughout the lockdown.

“I think we’ve been encouraged,” Dawe says. “There has been a long period of very strong retail demand, and the spike in North American retail has lasted long than it did in Europe and elsewhere with pantry loading.”

Questions still linger about how reduced restaurant capacities and other restriction easements will affect potato product sales. With large events such as concerts, festivals and sporting events off the table for the time being, french fry sales will still be down.

“It likely will not be back to the level that we once saw” without events like those, MacIsaac says. “But I can’t predict any further ahead than that.”

For farmers they’ll continue along as they always do, caring for this year’s crop and harvesting it, hoping the future will be better.

“We’ll just have to react accordingly,” Van Boom says. “Not desirable, but hey when it’s something this big and the scope of what’s going on here, it’s just something you’ve got to do.”