New investment keeps Manitoba spud farmers on task

Manitoba’s potato farmers have been given a challenge. And a tremendous one, at that. Last year, McCain and Simplot Canada announced major expansions to their already fully operational potato processing plants in Manitoba — an opportunity that will require an increase in capital expenditures and overall production capacity for the farmers they contract.

“It’ll cost growers millions of dollars in order to take advantage of this opportunity,” says Dan Sawatzky, general manger of Keystone Potato Producers Association (KPPA), an organization that negotiates contracts and conducts research on behalf of its members. “Capital expenditures such as land, storage, irrigation and others come into play. But, when you see an opportunity, you don’t want to miss out.”

MASSIVE EXPANSION = MASSIVE DEMAND

Simplot Canada’s $460 million investment to more than double the footprint of its Portage la Prairie facility (from 180,000 to 460,000 square feet) is a bold move, signalling growing optimism in Manitoba’s potato industry.

It’s a move that also places a sizeable production burden on the province’s growers while creating additional employment opportunities in Portage la Prairie, a community 30 minutes west of Winnipeg that has attracted the attention of many large, high-capacity facilities for its central location, proximity to efficient transportation, access to sustainable electricity and its large labour pool.

“Manitoba delivers in so many ways that will help make this project a success,” said Mark McKellar, Simplot’s North American food group president, in a news release. “It has access to quality potatoes, a strong grower community, availability of highly skilled employees and distribution routes that continue to expand our footprint.”

The Simplot plant will effectively double its production capacity when it goes online. Where it required six million centum weight (cwt) of potatoes from its growers before the expansion, it’ll require about 12 million once the expansion is fully operational.

And already, potato farmers are having to step up. “Last year, they contracted 6.9 million cwt of potatoes,” says Sawatzky. “This year, they contracted 10.7 million cwt.” For the uninitiated, 10.7 million cwt is the equivalent of 10.7 million 100-pound bags of potatoes.

About 64,000 acres of potatoes are planted in Manitoba every year, of which 46,000 are destined for the processed food market such as french-fry production and other freezable grocery items.

In order to meet this looming new demand, Manitoba potato acres will have to increase by about 18,000, a loose but helpful estimate that doesn’t take into account the potential for increased production on land currently growing the vegetable.

McCain has also decided to invest in Manitoba, earmarking $75 million towards improving its Carberry and Portage la Prairie facilities. The company committed to spending $30 million on its Carberry plant in southwestern Manitoba, and $45 million upgrading its Portage la Prairie facility.

“McCain’s investment in both the Portage la Prairie and Carberry facilities is reflective of the continued demand for McCain frozen potato and potato specialty segments and signals the company’s long- term commitment to the region and the province,” says McCain spokesperson Andrea Davis.

“The recent grand opening of the potato receiving area expansion celebrated the 40th anniversary of McCain Foods’ continued operation and investment in Portage la Prairie,” adds Davis. “Capital investments made by McCain to the Portage la Prairie facility from 2016 to 2019 include: installation of a new high-efficiency potato sorting system; cutting-edge processing and packaging equipment; new onsite waste water treatment systems; and upgrades to the facility’s heating, freezing and refrigeration systems, which helps improve the facility’s environmental footprint.”

MEETING DEMAND: NEW VARIETIES, NEW TECH, NEW THINKING

This all amounts to a good news story, but it has to be sustainable. The potato production demands placed on Manitoba’s farmers have to make sense.

Sawatzky, a former potato farmer himself and whose job it is to represent the growers tasked with meeting this demand, is cautiously optimistic — a sentiment western Canadian farmers know all too well.

“Any expansion has to come in a sustainable way,” he says. “We struggled to meet demand this year. McCain and Simplot are satisfied this year. Next year, there will be more demand. I guess we’ll find out if producers are going to make it. Both companies remain optimistic in our ability to increase production.”

Sawatzky maintains that good rotations are paramount as farmers reach into their toolboxes to increase production while keeping disease pressure as low as possible. “Variety development will be key, as well,” he added. “If we could find a variety that could bulk up faster, that would benefit our growers.”

According to Sawatzky, in 2003, Manitoba grew more than 100,000 acres of potatoes. While the number of acres and farmers has decreased since then — largely due to the ebb and flow of the marketplace — growers today are able to produce just as many potatoes on 64,000 acres as they could on 100,000. This is primarily due to advances in irrigation and other agronomic practices.

As of now, the most popular potato for processors is the Russet Burbank, but there are other varieties KPPA is putting research dollars towards. Market development is key, and for the potato industry, market development is a more direct-to-consumer consideration than it is for other crops such as wheat, canola or soybeans.

A new, higher-yielding variety doesn’t mean success. It has to be desirable to consumers and to the companies that deal directly with them. If McDonald’s or KFC or any other large, fast-food business starts using a variety, that will be enough to bend demand and either sink or elevate a potato.

Manitoba currently grows the second- largest number of potatoes in Canada behind Prince Edward Island. While Sawatzky maintains it may be the case that, one day, Manitoba will exceed PEI’s potato acres, there is no desire in his organization or among the farmers KPPA represents to de-throne the province as the potato capital of Canada.

The spirit in which McCain and Simplot have invested in Manitoba speaks well of the province’s growers. And if potato production grows as it’s poised to do, Sawatzky and KPPA will be there to support it.

These companies said yes to Manitoba and Manitoba’s potato growers are happy to take on the challenge.