Jun 29, 2006PEI Potato Buydown Numbers Released
Close to 8,500 acres were accepted in the 2006 Potato Acreage Buydown Program in Prince Edward Island, which had an application deadline of May 1.
“We are very pleased with this level of support from growers,” said Morley Wood, board chairman. “It shows that growers understand the need to reduce acres in order to bring supply more closely in line with demand. By working with our counterparts in United Potato Growers of America and potato organizations across Canada last spring, we were able to reduce supply and have a positive impact on grower returns. The 2006 Buydown Program is part of our effort as an industry to improve returns again this year.”
Similar efforts are underway in the United States, with positive preliminary estimates. Bruce Huffaker, potato analyst and editor of North American Potato Market News, estimated last week that the 2006 U.S. fall potato crop will increase by less than 1 percent from a year ago. The small projected increase of approximately 7,400 acres across the U.S. is a significant departure from previous dynamics in the American potato industry. Historically, strong price years are followed by large increases in planted acreage, which often leads to oversupply and depressed prices in the following year. It appears as though this did not happen in 2006 plantings.
This spring, Prince Edward Island (PEI) potato growers voted in favor of again establishing a cap on each farm’s potato acres. The cap was based on the average of each grower’s 2003 and 2004 registered potato acreage and established an overall cap of 106,000 acres for the province. Growers who had acreage accepted in the Buydown Program will receive $200 for each acre by which they reduce their plantings from their 2006 cap. A similar program was offered for the first time in 2005, and a total of 9,587 acres were purchased last year. According to Statistics Canada, PEI’s planted acreage in 2005 was 95,500 acres.
“Over the past two weeks, we have heard from several growers who have finished planting their 2006 crops and have not used up all their cap,” said Ivan Noonan, board general manager. “Therefore we feel our acreage will be at manageable levels again this year if we get normal growing conditions. No one wants to go back to destroying good quality potatoes and spreading them on the land due to surplus production. We strongly encourage growers to develop market channels for their crops and to plant only what they have a home for. Otherwise, we wind up with too many potatoes and everyone suffers from poor prices.”
Growers will receive an initial payment of $100 per acre on Dec. 1, 2006, and a final payment on Feb. 1, 2007. Statistics Canada will release its preliminary estimate of Canadian potato acreage on July 21, 2006.