Canadian Potato Growers gird for cutbacks

Joe Brennan and his fellow potato growers in New Brunswick are bracing for the fallout from the French fry meltdown.

Mr. Brennan, who is also the chairman of Potatoes New Brunswick, the province's potato marketing board, says he will have no choice this planting season but to cut production at his farm in Bath, N.B., after hearing the bad news from his key customer, French fry titan McCain Foods Ltd. of nearby Florenceville.

McCain, producer of a third of the world's frozen French fries, has warned its potato suppliers in North America that it will be reducing what it sources from them by between 20 and 30 per cent this year.

A key factor in its decision is the decline of French fry consumption in the U.S. fast food industry. The economic slowdown has hurt the food service sector as consumers curb their restaurant visits. Compounding the problem is the rise in the value of the Canadian dollar, which has a negative impact on exports to the United States.

Cavendish Farms Ltd., another major French fry producer, part of the Irving family empire, is also cutting back on its contracts with spud growers, most of whom are in Prince Edward Island.

Potato producers are still waiting to find out which growers will be affected, but news of the cutbacks is a huge blow, Mr. Brennan said.

"There will be a significant impact on all our operations,"he said about the slowdown. "This is having an impact right down the supply chain."