Under shadow of COVID-19, Island potato growers face uncertain season

The P.E.I. Potato Board is expecting a reduction in potato acres planted this year, as processor Cavendish Farms deals with reduced demand for its frozen fries from restaurant closures across North America.

Those who grow for french fry industry expecting volume cut of up to 20% in contract with Cavendish Farms

Island farmers are expecting fewer acres planted this year of the province's most valuable cash crop, along with a corresponding drop in revenues as COVID-19 takes a bite out of P.E.I. potato production. (Brian McInnis)

In eastern P.E.I., where the soil is sandier and dries quickly, some Island potato farmers have already begun planting this year's crop. Other growers farther west will start planting in the coming weeks. 

But even before most potatoes are in the ground, many producers are facing an uncertain future for their product, which could affect decisions they make around what to plant this spring, along with the money they're able to make once potatoes have been harvested.

"It's going to shake itself through so that everybody's going to feel some hurt," said Vernon Campbell, who farms near Kensington.

The closure of restaurant dining rooms across North America has taken a big bite out of demand for P.E.I.'s biggest export — frozen fries and other potato products.

Like many Island farmers, Campbell grows potatoes under contract with processor Cavendish Farms, the biggest private employer on P.E.I.

Vernon Campbell, who grows potatoes on contract for Cavendish Farms, says a reduction in contract volume with the processor will have economic effects felt throughout the industry. (CBC)

The company has already asked Campbell and its other suppliers to start selling what's left of last year's crop to other buyers if they can. Campbell is sitting on 12 million pounds of potatoes, about twice as much as he would usually have this time of year, and still expects to sell those to Cavendish Farms. 

But the timeline for delivery is now delayed and there's a possibility Cavendish might still not take them all — something the company could be allowed to do under its contract because the circumstances leading to the drop in demand are beyond either parties' control.

Meanwhile, Campbell and other growers have a new contract for the coming season, but won't know until the end of April how many potatoes the company wants from them from this year's harvest. They've been told to expect reductions in volume of up to 20 per cent.

Campbell said he'll plant the excess acres in barley or alfalfa or something else "but of course potatoes have always been the cash generator."

Drop in overall acres expected, says potato board

Potato receipts are worth a quarter-billion dollars a year to Island farmers, not to mention the hundreds of millions per year in the value of frozen potato exports from P.E.I.

Jason Hayden, chair of the P.E.I. Potato Board, said he expects an overall drop in potato acres planted this season, and a drop in revenues that could hit contract potato growers particularly hard.

"For a typical farm cutting back 10 to 20 per cent may not seem like much, but each farm is sort of built to handle a certain capacity," he said.

Potatoes are by far the highest value crop for Island farmers, with receipts of $221 million in 2018, more than two-thirds the value of all P.E.I. crops. (Brian McInnis)

There are variable costs for things like fertilizer that can go down with lower production, Hayden explained, but also fixed costs for things like equipment that are static "and it makes it hard to not only be profitable, but just to break even in a year like this."

The board is discouraging farmers from planting more potatoes than they have a market for, for fear of flooding the market and depressing prices.

Canadians love their COVID chips, but it's not enough

There's been an uptick in demand for fresh potatoes from consumers stocking up, and for product to be made into potato chips, because as the United Potato Growers of Canada noted in a recent report, "consumers have continued to purchase their favourite stay-at-home snack and comfort food" through the pandemic.

But Hayden said it hasn't been enough to make up for lost restaurant sales.

"The really big unknown is our markets. Will restaurants be open and food service be back sort-of to normal or will that still be more-or-less closed down?" he said.

Jason Hayden, chair of the P.E.I. Potato Board, says a reduction in potatoes this year will make it harder for many farmers to turn a profit. (Laura Meader/CBC)

The potato industry is also facing a potential labour supply shortage as growers who use temporary foreign workers face delays getting them to Canada and getting them through the federally-mandated two weeks of isolation before they can be put to work. 

There are also concerns that an outbreak of COVID-19 at Cavendish Farms, which employs 700 people, could put a stop to processing.

And then there are concerns that even if restaurants open back up, international supply chains could remain disrupted, jeopardizing the more than $300 million in frozen potato products P.E.I. ships internationally each year.

Burial 'the last option' considered for existing stocks

As they consider spring planting, farmers are also mulling over what to do if they end up with tens of millions of pounds of potatoes from their existing stocks that can't be processed.

The options being considered include everything from making some available to local food banks to burying them in the ground. 

"That would be the last option," said Hayden. "We're certainly hoping we can make some kind of use of the potatoes that are on hand at the moment without resorting to that."

While expecting a hard season ahead, Campbell said he's been through other hard times, like when potato wart closed the U.S. border to P.E.I. potatoes.

"We're very blessed to live in a place like this. You know we've contained the pandemic so far," Campbell said.

It'll be "a good year to have behind us.… Keep your head down and work hard, and hopefully we'll be here for better days ahead."

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