News Markets and Marketing
Large potato surplus in North America, while pricing remains strong in Canada

The United Potato Growers of Canada (UPGC) released its November crop update Dec. 4, which looked at the fresh, processing and seed sectors in the industry.

Fresh sector

It is estimated that we had approximately 89,000 acres planted in Canada intended for the fresh sector, generating approximately 29.6 million potatoes available for fresh sales. North America continues to see a trend from red to yellow, which has the effect of improving yields and increasing production, even if acreage remains stable.

With the surplus in the United States, prices have dropped significantly in the U.S., however they have been holding well so far in Canada, although there have been more recent reports of continued downward pressure.

Idaho is trying to recover lost table market sales after two years of shortages, especially for russets, and there has been aggressive pricing since September. These low prices in the Pacific Northwest could lead to a drop in Canadian exports to the U.S. compared to last year.

UPGC continues to monitor surplus potatoes in the processing sector that could be dumped into the fresh sector. There have not yet been any significant reports of this type of movement, however, it is early in the marketing year.

Processing sector

There are large surpluses of potatoes in North America, especially russets, in the Pacific Northwest. Processors over-contracted acres in reaction to shortages over the past two years and have disposed of extra potatoes under contract, including in Alberta and Manitoba.

There is continued expansion in the sector: Idaho (Lamb Weston, American Falls), Washington (Simplot, Moses Lake), Oregon (Simplot, Kraft/Heinz plant in Ontario, not the province but in the state of Oregon) Alberta (McCain, Coaldale). However, the earliest will be in spring 2024 in Idaho, not soon enough to take much of this surplus.

Hollow heart and rot have been seen in russets in Eastern Canada and Maine due to the abundant rainfall received throughout the growing season, and even up to harvest in some areas, there are also reports of low gravities. Growers have tried to leave low-lying areas in the fields, but long-term storage problems may remain. UPGC does expect a tight supply of processing potatoes in Eastern Canada this year.

North American processors may try to regain market share thanks to the additional supply available and the difficulties of the European harvest, as global demand continues unabated.

Contract negotiations have begun in Washington and are positive to date.

Seed sector

Most regions of Canada reported good seed harvests. The seed regions seem to have avoided the heavy precipitation in the east and the hot temperatures in the west.

If processors end up reducing contracted acreage for next year as is being indicated, that will impact the seed business.

As in other sectors, some costs have stabilized, such as fertilizer and fuel, but overall, the cost of growing potatoes is the highest it’s been in years.

With regard to overall certified acres in the U.S., five out of the Top 7 seed producing states registered decreases in overall acreage, however, this was offset by an almost 4,000 acreage increase in Idaho. Most of that increase is in three types of russets and just over 2,500 acres in other varieties, according to the USDA seed acreage report.

In Canada, certified seed acres decreased in all provinces in 2023 except Alberta, Manitoba, Newfoundland and Nova Scotia, from 57,353 acres in 2022 to 56,272 in 2023, a total decrease across the country of just over 1,000 acres. There was a decrease of just over 2,100 acres in the Top 50 varieties and an increase in all other varieties of approximately 1,050 acres that makes up the difference year-over-year, indicating perhaps an overall reduction in seed acres but more experimentation with new varieties at a smaller scale.

Although harvest in Canada, and North America in general, was good for seed this year, there could still be regional and varietal shortages as were seen in the 2022-23 season.