Cutbacks in potato process contracts could push some growers out

A major plan to beef up potato sales is well underway by the Prince Edward Island Potato Board and the province, but some of the air leaked out of the tires this week with the announcement that processing companies are cutting back.
McCains confirmed it would cut about 20 growers from its processing contracts this season while Cavendish Farms is expected to drop about 10 to 15 as well.
"We're definitely concerned about this and not happy that there is a possibility we will lose some growers from the industry," Greg Donald, executive director of the PEI Potato Board, said Friday (Feb. 26).
"We're recommending that growers only plant acres with secured markets because it creates tremendous risk without a market."
Donald unveiled the marketing strategy that has enjoyed some successes at the International Potato Technology Expo at the Charlottetown Civic Centre Friday morning (Feb. 26) where growers were gathered for the trade show and work conferences.
"The new plan incorporates better communication and partnerships and more export marketing strategies,'' he said. "We need to provide what consumers want in other (international) export markets."
In conjunction with the Department of Tourism, the Potato Board has been focusing marketing drives in several sectors and has witnessed a 15 per cent increase in tablestock sales and a 45 per cent overall increase in Ontario.
The figures are solid, but Donald acknowledged that prices are still dragging their feet.
Agriculture Minister George Webster said the two big French fry processors are downsizing and he's been advised growers with smaller contracts without proper storage facilities are being cut loose.
"It's a serious issue for these growers who have enjoyed a fixed price,'' he said.
"These growers will have to soul search and decide whether to try the open market or worst case scenario discontinue. It's a changing landscape out there and we have to change with it, but when the recession ends there will be growth."
About 60 per cent of the PEI potato crop goes to processing. Last year's crop, the smallest since 1992, brought in about $200 million in economic input from 85,000 acres.
Webster said the focus is trying to generate other opportunities in other crops that are finding growth markets.
Donald told growers at the Expo session that consumption is down for French fries both domestically and internationally and the issue is compounded by the economic recession and the high Canadian dollar.