One thing is certain: there’s no shortage of demand for quality Canadian potatoes.
With processors in Western Canada and the U.S. Pacific Northwest expanding and building as we speak, potato inventory demands are on a sharp rise. In fact, I estimate we’ll need many thousands more acres of potato production to keep processors content as they continue to expand.
And growth in the industry isn’t just in the form of new builds: current facilities are ramping up production in every way possible. In the “old days” — even just 10 or 20 years ago — processors processed on a somewhat seasonal schedule: running really heavy only post-harvest. Now, virtually all processors are doubling shifts all year long.
Despite the huge jump in processing capacity currently underway, processors can’t keep up with growing demand: consumers are hungry and getting ever hungrier for quality processed products. This coming summer will likely be hard evidence of exactly that: I expect by July or August we’ll see shorter French fries and discolouration at fast food chains.
Some analysts even predict shortages of available processed product. Admittedly, last year’s harvest conditions were really challenging in a lot of key potato production areas. Still, processors’ difficulty maintaining a consistent flow of top-quality product shows just how little wiggle room currently exists in the processed potato arena.
Given the pull from processors, there aren’t many potato producers who aren’t at least thinking about expansion. Farmers are stepping up production by planting more acres and squeezing row spacing from 36 inches to 30. Some think we’ll see significantly more dryland farming in the future. Farmers are also doing all they can to increase and improve storage capacity and storage know-how in order to manage their inventory longer on-farm.
When I started in this business a decade ago, you were doing well if you could store into the end of May or June. Over the past 10 years, we’ve added virtually two months of storage across the industry. Some of the largest-producing growers, in fact, are literally shipping their potatoes the week before they harvest the next season’s crop.
Producers who can successfully hold quality potatoes the longest can routinely achieve higher contract prices than those who are squeezed for storage space or who don’t have the storage technology to maintain quality over the long term. I expect the price premium for long-term on-farm storage to only increase as consumer demand keeps growing.