EASTON, Maine — Frozen-food producer McCain Foods Ltd. announced this week that the company is cutting its potato sourcing in New Brunswick by 20 to 30 percent in response to lower demand for french fries, along with other market matters.
Officials with Florenceville, New Brunswick-based McCain Canada say they are not yet sure if the cutback on contracts with New Brunswick farmers will affect growers in Maine.
McCain, which was established in Florenceville 53 years ago, is the world’s largest privately owned manufacturer of frozen food products. The company operates a french fry processing plant in Easton.
The company cited weaker U.S. fry consumption, a high Canadian dollar, competition from low-priced European potatoes and leftover 2009 crop as the reasons for the decision to cut back this year on contracts with farmers in the province and across the rest of Canada.
McCain spokeswoman Calla Farn said all the farmers with whom the company contracts in New Brunswick for its Florenceville and Grand Falls processing plants will be affected, declining to give the volume of potatoes at play, for competitive reasons.
The company did not make cuts to its sourcing in New Brunswick last year, which led to the carryover in crop.
How the cuts will affect Maine growers is yet to be seen.
Dierdre Dickerson, director of corporate communications for McCain Foods USA, said Wednesday that no decision has been made about contracts with U.S. growers.
“There has been a lot of news coming out of Canada about the decision by McCain,” she said. “Of course, people are confused by that. But we have not made any decisions yet. We are still assessing the demand for our product.”
Demand is assessed annually, she said, and volume adjustments often are made.
“We are going to wait and see what the demand is before we announce volume adjustments,” Dickerson explained. “We may know that by the end of next week.”
Don Flannery, executive director of the Maine Potato Board, said weaker U.S. french fry and potato consumption is nothing new.
“The potato industry has been hit by the Atkins diet [which focuses on reduced levels of refined carbohydrates and refined sugars] and low-carbohydrate diets,” he said Wednesday. “I agree that the demand for french fries isn’t growing, but I think a major reason is because of the economy. The economy is affecting everyone.”
Flannery estimated that there are approximately 380 potato growers in the state, adding that close to 100 of those growers have “some contractual relationship with McCain.”
“That is not just for potatoes, but for a variety of crops,” he said. “So, I think we will see some impact from the situation in Canada, but I don’t think that it will be at the same level that they are seeing over there. We cannot go unscathed. I think growers will see fewer contracts with McCain, but I think — I hope — it is less.”
The Telegraph-Journal in Saint John, New Brunswick, contributed to this report.