PEI Potato Industry Shocked by McCain Plant closure

The Prince Edward Island potato industry is reeling today from the announcement that McCain Foods will close its Borden-Carleton French fry facility as of October 31, 2014. Many Island farm families have worked hard to deliver high quality potatoes to McCain Foods over the years, and growing for McCain was a major component of their farming operations.

McCain has been an important player in the Prince Edward Island potato industry for several decades, as it contracted with Island growers for delivery to processing plants in New Brunswick long before it invested directly by building a plant in Borden-Carleton in 1990. As well, McCain has purchased Island tablestock and seed potatoes for markets in Canada and around the world. There is no indication that those purchases will be affected by today’s announcement.

“We were shocked and disappointed by the news from McCain earlier today,” said PEI Potato Board Chairman Gary Linkletter. “As is the situation in several parts of North America, contract volumes at McCain’s PEI plant were reduced over the past few years. We understand that global French fry demand has increased significantly during 2014, and we had hoped that McCain would use the excess processing capacity in Borden to supply some of that expanded demand. Instead, we’re now dealing with the loss of the plant.”

Representatives from the PEI Potato Board met with senior McCain officials on several occasions over the past few years to seek ways of stabilizing and increasing the volume of potatoes processed in Borden-Carleton. The Board had also discussed the situation with senior government officials.

“Our growers are competitive and were consistently able to meet the quality specifications that McCain sought. However, McCain is a global company and running the plant at less than half its capacity means additional costs on the finished product. That in itself impacts pricing and markets for the product. We would have liked to see the volume return to original levels to address this,” said Linkletter.

In 2014, McCain contracted with 23 Island family farms for delivery of over $7 million worth of potatoes to the Borden-Carleton plant. McCain representatives have confirmed that they will honour the contracts they’ve signed with growers for 2014, but plans for beyond 2014 are not known at this point.

Linkletter concluded, “Given today’s announcement, we’re concerned for the growers who contracted with McCain in 2014, the McCain and employees and their families, and the support industries involved with the McCain plant. We have had some discussions with provincial and federal government representatives today, and we’ll sit down with them shortly to discuss options for finding other markets, including reverting to delivering potatoes to McCain facilities in New Brunswick for processing in 2015 and beyond. We’d also like to identify a means of keeping the plant operating in some manner.”