In a recent press release by the United potato Growers of Canada, UPGC general Manager Kevin MacIsaac discusses the potato planting intentions for 2012:
At this time of year the United Potato Growers of Canada would like to refocus its attention from last year’s crop towards planning for this year’s upcoming crop. Almost all areas of Canada received very favourable prices for last year’s potato crop. The price received by growers had everything to do with the supply of potatoes available for the marketplace. Almost all areas of Canada had reduced supply in 2011 due to weather related issues.
What will the weather be like in 2012? Will it be hot and dry; or will it be cool with excessive moisture? More importantly, will it be a beautiful growing season with lots of sunshine, perfect moisture levels, and moderate temperatures to sustain plant growth. This prediction is far from the reach of our hands, however one thing is for certain; a return to trend line yields across all regions of Canada in the same year, will create a potato pile that will challenge the best of marketing wizards. A betting man would likely feel that the odds of achieving below average trend line yields in all parts of Canada again are low.
The potato acreage devoted to processing use in Canada deserves attention. The past year has created a scenario where consumption of frozen processed products had started to rebound. Paralleling this trend was a reduction in processing acres as growers adjusted available processing acres in line with reduced contract volumes. The resulting decline in raw potatoes available for processing, will create increased demand for this year, as factories realign to supply the marketplace. Although this is viewed as positive, one must also keep in mind that no mention is made of requirements for the following year in 2013. Will frozen product consumption continue to rise again, or will it level out? It would be ludicrous to ramp up for one year, extending out two seed production years, for a short term gain. Long term contractual arrangements need to be recognized by bargaining associations from both producers and processing companies. Keep in mind a 5% increase in North American processing acreage in 2012 is substantial to deal with in 2013 if the stars are not lined up.
The final factor which has major implications for potato planting in 2012 is the value of other crops. Rotational crops such as wheat, corn, canola, and soybeans are at very high cyclical levels. There is profitability in growing these crops.
At the United Potato Growers of Canada, we are working on recommendations for planting acreage to match the market requirements of the upcoming growing season. With today’s cost of production, the stakes are high. As our United Potato Partner Seminars pointed out this winter, equity has been built over the past couple of seasons. Growers should take the steps necessary to minimize its loss.