Manitoba Growers Still Negotiating Volumes with McCain Foods

All three processors have cut producers, forcing some out of production entirely.

Published online: Apr 24, 2014 Allan Dawson
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McCain Foods still hasn’t settled on the volume of potatoes it wants Manitoba processing potato growers to produce this year, even though planting is just weeks away.

“We know there will be another decrease in volume, though (from last year),” Dan Sawatzky, manager of Keystone Potato Growers Association Inc., told the Keystone Agricultural Producers’ general council meeting April 11. “There are a lot of concerns in the potato industry.”

Growers have agreed on production volumes with Simplot and Cavendish Farms, which have potato-processing plants in Portage la Prairie, Manitoba, and Jamestown, N.D., respectively. McCain Foods has plants in Portage la Prairie and Carberry, Manitoba.

All three processors have cut some growers entirely from their contract list.

“With McCain, that number isn’t exactly clear because some growers have multiple farms, and until we have everything settled we don’t really know what it will come out at,” Sawatzky later told reporters. “The best I can say is probably about a half-dozen farms were affected completely with that company. Simplot has also cut a couple of growers at 100 percent volume.

“Some of those growers will have contracts with other companies. There are two (growers) I believe that will exit the business because of those cuts.”

McCain has said at minimum it will contract 65 percent of last year’s volume, Sawatzky said.

“We expect them to be quite a bit higher (when a settlement is reached),” he added.

“Sixty-five percent is not a good number. We’d like to see full contracting similar to last year or even have that increased, but right now they are not playing those cards.”

McCain and the grower association last met March 27 and is to meet again this week.

“We continue to talk so we’re optimistic,” he said, noting settlements have been reached recently in Washington State and Prince Edward Island, but are still outstanding in Manitoba, New Brunswick and Maine.

In a March interview, a senior McCain official said Manitoba is one of the highest-cost areas for potatoes in North America.

North American french fry demand peaked in 2006 and has since fallen 3.5 percent. Health concerns, an aging population and the price of french fries relative to other fast-food options are being blamed for the drop.

Manitoba potato growers harvested a bumper crop last year resulting in surplus stocks, which Lamb Weston is buying for its plant at Park Rapid, Minn., Sawatzky said. But growers are having trouble getting trucks to make the 1,000-km round trip because they are tied up hauling grain following a winter of poor rail service.

Last year there were 70,000 acres of potato production in Manitoba, making Manitoba Canada’s second-biggest producer behind Prince Edward Island.

Fifty-five thousand of those acres were for processing, grown by about 60 farmers—half the number there were 10 years ago, Sawatzky said.

 

Source: Manitoba Co-Operator

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