Winnipeg Free Press - PRINT EDITION

McCain raises cuts during contract talks

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MANITOBA potato producers are accused of pricing themselves out of the market.

Christine Wentworth, McCain Foods vice-president of agriculture for North America, said the province is becoming a high-cost producer, sounding alarms that further cuts could be headed the industry's way.

"Manitoba, like other areas in Canada, is not competitive with the (U.S.) Pacific Northwest,"àWentworth said.

Increasing yields in the province is paramount to the continued success of the industry.

Wentworth said potato producers in Manitoba get about 320 CWT per acre, with one CWTàrepresenting 100 pounds of potatoes. In areas of the United States, those yields can balloon to between 450 to 500 CWT, with the Pacific Northwest leading the way as the highest yielding, lowest-cost region in North America.

"It's not that costs are going up (in Manitoba), it is that in the past, the low Canadian dollar masked the inefficiencies,"àshe said. "Increasing yields is essential for the long-term viability of the Canadian potato industry, regardless of foreign exchange."

Another catalyst for contract cuts is the declining consumption of french fries in the North American diet, Wentworth said.

Statistics Canada figures show there was a decline in planted potatoes across the country from 2012, when more than 370,000 acres were planted, to 2013, when 355,000 acres were planted.

Currently, the Keystone Potato Growers Association (KPGA) is negotiating contracts for the 2014 growing season with McCain, Cavendish Farms and Simplot.

KPGAàpresident Dan Sawatzky said the industry suffered some challenges when the Canadian dollar was at parity with the U.S. greenback, but has stabilized since then.

Manitoba is rich with land and water that produce high-quality potatoes.

"That means that the factories have a higher recovery from our potatoes, which is a cost advantage for them,"àSawatzky said.

However, like every agricultural industry, the potato market is cyclical.

"When volumes are cut, it's a concern,"àhe said. "When they ask us to move on price, it cuts into profitability. The climate is maybe not as healthy as it has been, but it can always come back the other way as well."

The industry benefits the province.

"The economic benefits and spinoffs that the potato industry has, especially in central region and Westman are tremendous and we're fortunate to have this sector in the province and we want to keep it healthy," he said.

Sawatzky has a meeting with McCain Food officials next week. He expects once an agreement is finalized, other agreements will follow quickly.

-- Brandon Sun

Republished from the Winnipeg Free Press print edition April 4, 2014 B10

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