Potato growers to investigate ‘predatory pricing’ in the Ontario market

Productivity is going up and prices are going down for Ontario potato farmers. Frustrations are boiling over regarding the depressed state of fresh pricing as well as eroding government support for safety nets. The farmgate value of the 2014-2015 crop was $63.9 million, the lowest receipt in the last five years and down significantly from $77.6 million the previous year. 

“We need to remember that we get more productive every year,” said Glen Squirrell, chair of the Ontario Potato Board at the December 2 annual general meeting. “More irrigation, fumigation, better varieties and improved plant protection materials as well as the ability to harvest vast quantities of product in a hurry, have all contributed to our productivity. Mother Nature has also been kind. We haven’t had a really bad growing season since 2007.”

These comments laid the ground for a harsh review of the marketplace. Provinces in eastern Canada, particularly Quebec, are selling summer potatoes in Ontario during the height of the fresh-market season or chip potatoes below the Ontario contract price. Unsold crop from the 2014 growing season made its way into Ontario markets in the summer of 2015 further heightening tensions. Some of that ‘old’ crop resulted from market disruptions caused by Russia’s embargo of vegetables from the European Union. 

With these geopolitical trends still in play, Squirrel is warning that Ontario growers must rethink their 2016 planting plans. Storage holdings in eastern Canada promise a repeat of 2015.

“We have only one market for our fresh potatoes and we all know this is the local market,” said Squirrell. “We have to constantly defend our market from outside competition mainly from east of us.”

Telephone conversations between Ontario and Quebec grower groups are ongoing in efforts to prevent a similar situation in 2016. However, a resolution was passed asking that the Ontario Potato Board investigate the issue of predatory pricing in the Ontario potato market. The plan is to seek legal counsel as a first step.

The Ontario Potato Process Council, chaired by Harry Bradley, will be negotiating all agreements for the 2016 crop year with Frito Lay, Super Pufft, Olde York, Pre-Peel and Soups & Stews. The hope is that the weakening Canadian dollar will put imported product from the U.S. at a disadvantage while increasing the value of Ontario potatoes contracted for the U.S. market.

We need to remember that we get more productive every year. More irrigation, fumigation, better varieties and improved plant protection materials as well as the ability to harvest vast quantities of product in

a hurry, have all contributed to our productivity.

~ Glen Squirrell

Publish date: 
Monday, February 1, 2016

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