Canadian french fry manufacturers grapple with strong dollar

The continuing strength of the Canadian dollar is posing some problems for Portage La Prairie french fry manufacturers.

For Simplot Canada Ltd.’s Portage plant, unit director Chris Tompkins said the high dollar is having an impact on his operation.

“We buy our ingredients, we pay our employees, we pay for our utilities in Canadian dollars,” said Tompkins, but the potato-processing company sells its products at the U.S. list price.

“So the stronger the Canadian dollar gets, our input costs go up, making it higher compared to our sales dollars. It cuts into the profitability when you don’t have that gap that’s built into the exchange rate,” said Tompkins.

The stronger dollar has not affected the amount of sales because Simplot is locked into long-term contracts with all of its customers. What has been affected is profitability of the Canadian branch of the Idaho-based company.

The Portage La Prairie McCain Foods Ltd. operation has felt the pinch as well. In a visit to Portage earlier this year for the McCain Top Growers awards, president Fred Schaeffer identified the strong dollar as a challenge in exports.