Put a cap on it

Potato grow­ers ad­vised to cut back acreage in pre­dicted soft mar­ket

The Guardian (Charlottetown) - - FRONT PAGE - BY STEVE SHAR­RATT

Potato grow­ers ad­vised to cut back acreage in pre­dicted soft mar­ket.

The time has come for all P.E.I. potato grow­ers to get in a room, close the door and come up with a num­ber.

That num­ber is how many acres of pota­toes will be grown in 2016 — a year al­ready pre­dicted to be flat in the mar­ket­place and of­fer­ing few al­ter­na­tive cash-grow­ing crops.

If Jerry Wright had a magic wand, he’d slash a tasty por­tion of acreage from the en­tire North Amer­ica pro­duc­tion.

“You won’t make your­self more prof­itable by plant­ing more pota­toes,” said the pres­i­dent and CEO of the United Potato Grow­ers of Amer­ica.

“You can pray some­one else some­where (in the potato grow­ing world) gets nuked by the weather this year …, but your best op­tion is to plan a strat­egy.”

Wright was a guest speaker at the United Potato Grow­ers of Canada gath­er­ing at the Red Shores race­track and casino Wed­nes­day. He said all potato grow­ers would be bet­ter off, and have more price con­trol, by plant­ing less rather than de­light­ing the re­tail­ers.

Bear River potato grower Kevin MacIsaac agreed. He’s the chair­man of the Cana­dian arm of the group and told P.E.I. grow­ers an in­di­vid­ual acreage cap would raise whole­sale prices. Both speak­ers how­ever, knew they were not speak­ing to the con­verted.

“You have to un­der­stand the real mar­ket and how you have to be the low-cost pro­ducer,’’ said Wright to a room packed with grow­ers. “You can’t do this by plant­ing more pota­toes.”

The mighty pomme de terre is a bil­lion-dol­lar in­dus­try in P.E.I. with over 83,000 acres planted. It is still the most con­sumed veg­gie in North Amer­ica, but, like the Cana­dian dol­lar, world­wide con­sump­tion is fall­ing.

How­ever, the loonie slide may ac­tu­ally help.

“Agri­cul­ture prod­ucts are a high-value com­mod­ity, and peo­ple in China and In­dia want high qual­ity food as they get richer and you (here) seem well placed to do that,’’ said Eric San­tor, chief, eco­nomic anal­y­sis depart­ment with the Bank of Canada, dur­ing a sem­i­nar on the dol­lar de­cline.

And a lower dol­lar al­ways seems to in­crease ex­ports.”

Wright said the potato in­dus­try data doesn’t lie and when sup­ply goes down, lo­cal grower re­turn goes up.

“If you pro­duce a bal­anced sup­ply, you will get a bet­ter re­turn, but if you act with in­de­pen­dent self-in­ter­est like we all do, you will likely plant more.”

P.E.I. Potato Board chair­man Alex Docherty said a low Cana­dian dol­lar ex­pected to in­crease ex­ports is a tempt­ing prospect.

“We’ve tried cut­ting back acreage,” he said. “But I can’t see it hap­pen­ing … we’re an in­de­pen­dent bunch and if I cut 10 acres an­other guy is go­ing to plant 10 more.”

But Wright said a potato over­sup­ply is a re­tailer’s de­light al­low­ing them to make a 65 per cent profit mar­gin.

“Grow­ers are giv­ing away all their mar­gins for the priv­i­lege of grow­ing pota­toes,” he said.

For­mer P.E.I. Fed­er­a­tion of Agri­cul­ture chair­man Alvin Keenan said it’s a fine bal­ance be­tween what the mar­ket wants and what the sup­ply can pro­duce.

“There are some great op­por­tu­ni­ties ahead, and luck is when op­por­tu­nity and prepa­ra­tion meet.”

HEATHER TAWEEL/THE GUARDIAN

Kevin MacIsaac, left, gen­eral man­ager, and Ray Keenan, chair­man, United Potato Grow­ers of Canada, chat dur­ing a break of the 2016 United Potato Part­ners Sem­i­nar held at Red Shores Race Track and Casino in Char­lot­te­town Wed­nes­day.

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