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Potato growers cutting back

Fewer spuds in ground as consumers shun fries

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North Americans are eating fewer french fries, and that has forced some Manitoba farmers out of the potato-growing business and driven potato acreage here to its lowest level in nearly 20 years.

Keystone Potato Producers Association (KPPA) officials said Thursday four Manitoba farmers have been forced to switch to other crops in the past year after their supply contracts with local potato processors were terminated.

And 90 per cent of the province's remaining 59 processing-potato growers have also seen their contracts reduced, said KPPA manager Dan Sawatzky.

Sawatzky said the cuts are part of a trend that has seen the three processors that buy Manitoba-grown spuds -- McCain Foods, J.R. Simplot Co. and Cavendish Farms -- slash their purchases by 25 per cent over the last two years.

'It's a big blow. But I don't think the industry will disappear'

That has resulted in potato acreage here plunging to a 19-year low of 63,384 acres. That's down from 70,000 acres in 2013 and a peak of 103,000 acres in 2003. It's also the lowest it's been since 1995, when 60,000 acres of potatoes were grown here.

Sawatzky and KPPA president Chad Berry said processors have blamed the contract cutbacks on a drop-off in french fry sales in North America, as consumers switch to what they feel are healthier food options.

"It's a big blow (to the local potato-growing industry)," Berry said of the contract cutbacks. "But I don't think the industry will disappear."

"It has been a real hardship for some of our producers," Sawatzky added. "But I don't want to be too doom-and-gloom... We're still hopeful things can be turned around."

He noted Canadian french fry exports to the United States, which had been declining since last fall, have rebounded in the last three months. That caught processors by surprise and has reduced the North American inventory of frozen fries to a 21-year low of only about 28 days worth, he said.

He said producers are hoping if fry supplies remain tight for the rest of the year, processors will contract for more potatoes next year.

McCain and Cavendish officials could not be reached Thursday for comment, and a Simplot spokesman declined to comment.

A McCain official said earlier this year, when the company was in contract talks with Manitoba producers, french fry consumption was declining in North America.

She also said Manitoba-grown spuds were becoming too costly compared to those grown in the Pacific Northwest, which she described as the highest-yielding and lowest-cost potato-growing region on the continent.

But Sawatzky disputed that claim at the time, saying Manitoba produces high-quality potatoes, and this year's decline in the value of the Canadian dollar has also helped make our spuds more cost-competitive.

He said Thursday Manitoba growers aren't the only ones who have seen their contracts with processors reduced in the last two years. Growers in Prince Edward Island -- Canada's top potato producer -- New Brunswick and Maine have been hit with even bigger cutbacks. And processors are also buying fewer spuds from Alberta, Oregon and Idaho, he added.

McCain, which has processing plants in Portage la Prairie and Carberry, is the province's biggest potato processor. Simplot, which also has a processing plant in Portage, is the second-largest, while Cavendish Farm buys potatoes here for its processing plant in Jamestown, N.D.

Berry said McCain has cut its local purchases by 18 to 20 per cent in the last two years. Sawatzky said Simplot is buying about three per cent less than it was, while Cavendish has slashed its annual purchases to 303,000 bags from 1.1 million bags in 2012.

"But it's the McCain (cutbacks) that really hurt," he said.

Republished from the Winnipeg Free Press print edition July 25, 2014 B7

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