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Norte Am. 28/02/2018

Canadá: Potato Producers Welcoming Simplot Expansion

It’s the biggest news for potatoes in 15 years. That’s from Keystone Potato Producers Association manager Dan Sawatzky in response to yesterday’s announcement that Simplot is doubling production of potato processing in its Portage facility .

Dan Sawatzky (photo by Mike Blume)

"We’re going to see an increase in capacity in Manitoba," says Sawatzky. "Certainly it adds about 15,000 to 18,000 acres. That’s significant. The last time we’ve had news like that was in 2003 when Simplot built here. It’s the biggest news we’ve seen in about 15 years in the potato side of the business."

Sawatzky explains McCain pulled one of their lines back a few years ago, but with the exchange rate of our dollar they’re back in full operation again. He adds the decision for Simplot’s expansion is likely based partly on a good current dollar value as well, plus an increase of demand in the country.

He notes Manitoba’s current climate with the current government, along with the municipal support to attract major industries, has also attributed to the news.

Statistically, the current capacity across Canada for frozen potato production is about 45-million hundred weight per year. Of that, Manitoba has 15-million hundred weight. Sawatzky says the expansion could potentially put the province up to 21 to 22-million hundred weight on the frozen processing side. Other provinces that are major players in processing include PEI and New Brunswick who are roughly at 12-million. PEI capacity is Cavendish capacity and New Brunswick is McCain with two factories in that province which is about 8-million. Alberta has three processors, and also had a new announcement last year with Cavendish increasing their capacity in that province. All in all, he notes, this puts Manitoba firmly in the lead as far as frozen processing goes.

Overall potato production, including seed and fresh production, PEI has always held first spot in the nation,including acreage with 90,000 acres. Manitoba has about 65,000. With volume, Manitoba has been edging closer to PEI because of higher yields. Sawatzky says we’re about 200-million hundred weight behind PEI and the Simplot announcement has the potential to push Manitoba ahead of PEI. He notes overall production, emphasizing this is not speaking about acreage, Manitoba should lead the nation.

As far as competition goes, the grower base currently here, since the last few years’ worth of increasing volume, growers have utilized the infrastructure in place. Sawatzky says some it was idled due to draw-downs and reductions beforehand. However, he notes, all growers are running at full capacity. This means any additional volume or acreage does come with a price. He says sheds will have to be built, and more land will have to be developed along with additional irrigation. Sawatzky says both processes will see the capacity of growers stretched at this point.

Sawatzky says a politician who was aware of the announcement this past weekend noted Simplot’s announcement may push McCain to do something as well. He notes those were his words, and he personally does not have a comment on that.

He adds it’s an exciting opportunity, and he’s glad we have the climate to allow for this kind of announcement. Sawatzky says Manitoba has plenty of things in favour to take advantage of this. As with any ability to meet demands, he notes, it has to make sense for growers as well. This means the process will have to come up with ways to attract growers to meet the opportunity.

He adds Agriculture Minister Ralph Eichler noted at the announcement event that this needs to also be a win for producers as well, with sustainability on their part to take advantage of the opportunity.


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