Thursday, 9 April 2015

Bigger Not Necessarily Better

Yield is a word used a lot in farming. Bigger is usually better, but when it comes to the potato industry on PEI, the more important question is how. This is from a recent column:

Potatoes are still the dominant crop in PEI’s most important industry, so its fortunes matter to all of us.   As the late Pat Quinn said about the Toronto Maple Leafs:  “For better or worse, and whether people like it or not, it’s the most important hockey franchise in Canada.”  Love ‘em or hate ‘em , the potato industry’s challenges are our challenges, and there’s  a lot at stake.
For decades PEI was the big dog on the block in Canada. It had better quality, bigger yields than growers elsewhere in Canada, and dominated the big consumer markets for fresh potatoes in Montreal and Toronto. That changed in the mid 1990’s with the loss of an important transportation subsidy,  well financed buy local campaigns in Ontario and Quebec, and new varieties that allowed growers elsewhere to produce the “Idaho” typed russet potato that’s much in demand.  As if that wasn’t enough,  PVYn  knocked the stuffing out of the seed potato business.   Reluctantly for most,  growers now play by the rules of the french fry business, and that’s a game farmers are at risk of losing, not as badly as the Leafs, think Boston, a long proud history, many good players, demanding ownership, good coaching, but still in trouble.
With McCain gone, Irving owned Cavendish Farms is the demanding ownership and it doesn’t like what it sees: large mostly U.S. based frozen potato producers like Simplot, Lamb Weston, McCain, quickly gaining market share in burgeoning Asian markets, but more importantly buying from growers in the North-Western U.S. with bigger yields than growers here.  Yield is  a critical benchmark in the french fry business, how many hundredweight produced per acre.  The bigger the yield the less processors have to pay growers to keep them in business:  farmers get a bigger pay-weight per cost of production, or have to grow fewer acres to meet their contract. Either way, in a very competitive business with tiny margins,  yield matters a lot. 
Growers are hearing from Cavendish Farms. The company wants, expects ,  is demanding  (take your pick) growers to increase yields closer to the North American standard, from 250-300 hundredweight per acre to the industry norm south of the border, 400 and more.   But just how will this happen?  With soils on many (not all) farms battered and bruised, really the only way to do this is with water, and more fertilizer.  Water has huge political and environmental hurdles to overcome, and more fertilizer feels like a big step backwards.

Ever since the worrying royal commission on nitrates in 2008 that indicated rising nitrate levels in aquifers throughout the province, there have been many efforts to lower fertilizer use. “Nutrient management” is the new buzzword. It’s something that’s very real and very necessary.   Agrologist Steve Watts continues to do critically important research  on maintaining  quality and yields using less fertilizer, the 4R approach. I think this is what farmers have to work towards, not trying to increase yields by bumping up the fertilizer bill.

Then there’s water. Rightly or wrongly the moratorium on new irrigation wells has become a bottom line issue for many, many voters, and political parties who don’t get it right will pay a price.  I think on a watershed by watershed basis there is justification for more permits, but that’s a subtlety that will get lost in the noise of an election campaign. A month ago there was a feeling that the Liberals would get re-elected, go through some  kind of public process on a new Water Act, and a limited number of new permits would be forthcoming.  Now with political ethics, possibly corruption making headlines, all parties are feeling competitive, and fighting for every vote.  It’s hard to think of a more motherhood issue, a promise more easily made,  than protecting the quantity and quality of groundwater.

The low Canadian dollar will give Cavendish Farms some breathing room, and I hope they pass along some of this advantage to growers who can’t absorb more price cuts.  I hope the time can be used to keep the “nutrient management” and “4R” efforts gaining traction, and that this in turn can give the public more confidence that nitrate levels are falling.  Maybe Cavendish can develop  a “low input”  or “environmentally sustainable” line of frozen potato products that could play off these changes and charge a premium.  OK my feet are back on the ground. The more likely scenario is that Western U.S. growers will lose the ability to irrigate as aquifers there dry-up, and PEI becomes more competitive by default. 

There’s no Connor McDavid in any of this, no quick and easy solutions. I just want to see farmers given every opportunity to do the right things. Demanding bigger yields won’t do that.  

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