C3

By Jacques-François Levesque

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Record high fuel prices and uncertain crop values are making the 2008 potato crop a stressful business venture for New Brunswick farmers. With the last three years where the price market was below average value, the farmers are faced with enormous concerns. One of their main concerns is how to handle their production costs.

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Jacques Levesque

Agricultural producers are facing an an uncertain and stressful spring due to the high price of fuel.

"It has been a very alarming time due to the high price of fuel. With the continuous rising price of oil, all direct and indirect needed products and services related to the farm industry have and will be affected," said Jean-Marie Pelletier, chairman of the board of directors for Potatoes NB.

For example, the price of fertilizer went from $365 to $514 a ton while at the same time the market value per 100 pounds of potatoes was between $3.50 and $4. Farmers are expecting that the price for fertilizer for next year will go up to $1200 a ton. Also, during the winter and early spring, came another difficulty, the transportation cost for bringing their product to the market. The price per 100 pounds went up to 50 cents.

Industry officials point out that the price of oil affects all transportation commodities. It's not only the consumers that are affected but also the farmers. The cost of new machinery, parts, repairs and services have already risen. Also, the farmers are expecting that all of their fixed costs will raise, including insurance, electricity, food inspections, salaries, and paperwork. Considering the volatile and uncertain price of fuel for the next harvesting season, farmers don't know what to expect…

"At another level, the world's competitiveness trends to hold down potato prices, is another concerning factor for the farmers today," said an industry official. "Import tariffs on potatoes and potato products are applied by most countries. Potatoes provide a classic example of tariff escalation, where importing countries protect processing industries by putting higher duties on processed products than any other material commodities."

Demand is currently exceeding supply for the current potato markets in June and July, but the higher prices don't help local farmers who have already sold their crop and are in a new production season.

Are there some signs of hope?

"Yes, there is hope because the potatoes are an excellent source of nutrition and more and more customers are realizing that the potato is a great choice given its versatility and great taste. Potatoes can go a long way to nourishing our population and we need to unite ourselves to find better ways at reducing our production costs and uniting together to better manage our supply," Pelletier stated.