McCain lays off 10% of Portage La Prairie workforce, cuts price offered to farmers

McCain Foods is laying off about 10 per cent of its workforce in Portage la Prairie this fall and Manitoba potato producers are expecting a leaner crop year.

About 40 people out of a workforce of about 400 at McCain's in Portage are expected to be laid off. Calla Farn, a spokeswoman for McCain Foods at its Florenceville, N.B., offices, said the layoffs at its Portage la Prairie plant represent the elimination of one shift.

Company and industry officials say the layoffs are a result of declining french-fry demand which is also leading to lower prices and lower volumes for producers.

Potato producers were to meet Friday evening in Portage la Prairie to discuss the latest contract offer from McCain after two earlier proposals were rejected.

Garry Sloik, executive director of Keystone Vegetable Producers Association, said the strong Canadian dollar and softening consumer demand are driving down prices that french-fry processors are prepared to pay as well as the volume of potatoes they are contracting from the producers.

Potato producers in Manitoba (about 85) will plant about 72,000 acres this year, down from 79,000 last year. Peak production was in 2003 when producers planted about 103,000 acres of potatoes in Manitoba.

Sloik said this year processors are offering around $9.50 per 100 pounds of potatoes. Last year, they paid between $11 and $11.50 per 100 pounds.