With seed set to go into the ground, local potato growers are still without contracts from southern Alberta processing plants.
Some seed, in fact, was already in the ground before last week’s snowstorm, albeit a very small amount, according to Edzo Kok, executive director of the Potato Growers of Alberta.
But no signed contracts does not mean things are at a standstill for local growers.
“They’ve given us some preliminary volume numbers,” said Kok, who added those are the numbers growers have to work off of at this point.
No matter what way it is sliced, however, Vauxhall-area potato producers will not be growing as many acres as 2009.
“There definitely will be volume decreases from last year,” said Kok.
“It will vary by producer. We think we may be down 3,500 acres versus last year.”
That will impact growers and their bottom lines.
“The overhead goes up when you are spreading the cost over fewer acres,” said Kok, who added that includes depreciation of buildings and equipment. “It drives the cost per tonne up. It’s a bit of a hard knock, especially since we know prices are going to be down.”
Prices are going down for one simple reason — too many potatoes were grown last year throughout North America.
“There is a high inventory of finished goods in North America,” explained Kok, who added potato-processing plants in this continent are still using the crop from last year, as one U.S. state put itself in a bind more than others. “Idaho’s crop was particularly long.”
Idaho overplanted on speculation last year, then had the biggest yield ever for its crop, which led to an oversupply situation. Kok added the PGA to encourage local growers to be responsible with their planting patterns, so that it not replicated in southern Alberta.
“Our message to our growers is and has been for the last few years, is you should be growing only what you have committed contracts for.”
The problem is compounded by the fact the United States will be buying fewer potato products from Canada this year, as factories south of the border still have supply to get through.
“The U.S. is our biggest customer, and they are going to focus on keeping their factories busy,” said Kok, who added the high Canadian dollar is yet another complication. “When our dollar as at 84 cents, we could make it (potato products) cheaper than they could. So, it would pay for them to import from us and export their own crop.”
With the loonie still surging, ad expected to top the U.S. dollar in the near future, the tables have turned, and many expect it to stay that way.
“The media is talking we could have a strong dollar for a year or two,” said Kok, who added that will force the Canadian potato industry to get creative and find some solutions. “So, we have to be more efficient and look at new markets.”
But before that process can begin, growers need to be able to get back into the fields. Last week’s snowstorm dumped a significant about of wet, heavy snow on the region, something Kok added he did not mind one bit.
“The moisture is welcome. We’re more than happy to delay seeding for more moisture.”
But what would make growers even happier is a resolution to the issue of contracts with southern Alberta potato processors.
“We’re looking forward to getting these contracts settled, so everyone knows how much they are planting and how much they are getting paid.”