Manitoba spud deal not set for 2015Potato producers in Manitoba might see a strengthening production picture because of a weaker Canadian dollar, and because of counter-moves to the export interruptions in Seattle this winter.
By: Mikkel Pates, Agweek
FARGO, N.D. — Potato producers in Manitoba might see a strengthening production picture because of a weaker Canadian dollar, and because of counter-moves to the export interruptions in Seattle this winter.
Manitoba has three potato processing plants — Simplot Foods in Portage la Prairie and two McCain Foods plants in Carberry and Portage. Simplot has a potato processing plant in Grand Forks, N.D.
Dan Sawatzky, Keystone Potato Producers manager in Portage, says it isn't clear whether Seattle export problems will increase Manitoba potato production. He says the ongoing exchange rate with the Canadian dollar worth 80 percent of the U.S. dollar could influence increased production in Canada.
United Potato Growers of Canada, meanwhile, says the disruptions could boost Canadian production.
Sawatzky leads the negotiating team for producers dealing with companies. He says his producing region is typically last in North America to plant, so probably won't complete its contract before late April. Sawatzky says the industry will have to make some adjustments with the interference of the Seattle port because of a Longshoreman union slowdown. He says the union matters were settled at the end of February, but it will be two months before the "pipelines are cleared and we're back to normal."
He says the exchange rate is a bigger factor. The Simplot plant in Manitoba was built in 2003 and put in production in 2004, when a Canadian dollar was worth only 60 to 80 cents.
“That's why there was interest in building here,” he says.
Sawatzky says the terms of a contract have to do with more than the exchange rate, but include export growth potential.
One grower for the Grand Forks plant who declined to be named says that region’s contract price and volume has been set, and it is a “rollover” deal — the same price and volume as last year — but declined to disclose either figure.
Canadian potato acres declined by 6.7 percent last year, as McCain and Simplot shifted production to lower-cost regions. Manitoba produces about half of the 600 hundredweight per acre yield in the state of Washington. Processors in Washington state had inventory, but couldn't ship it, and lost business to Europe, although solid figures aren't yet available. In the U.S. Pacific Northwest, about 90 percent of the crop is exported.