July 2015
November 19, 2015
AGENDA
• Agricultural Economy in PEI
• Cavendish Farms’ Impact on
PEI Potato Industry
• Potato Yields
• Irrigation and Cavendish Farms
22
Prince Edward Island
OVERVIEW
Agriculture is vital to PEI, especially
potato farming.
Prince Edward Island
• Currently there are 1,500 farms growing crops and raising livestock
• Of this, approximately 350 are potato farms
Potatoes
• Single largest agricultural commodity in terms of farm cash receipts
• 2014 - Harvested potatoes totaling 2.6 Billion pounds
• Value range of crop in last five years:$227 to $285 million (subject to
market fluctuations)
• Approximately 89,500 acres of potatoes were planted in 2015
3
Prince Edward Island
POTATO INDUSTRY CONTRIBUTION
PEI Potato Industry Employment (direct and indirect)
• 8,283 jobs
• 12% of total workforce
Total Annual Contribution
• $1.065 billion in direct and
indirect economic benefit
• Representing 10.8% of
PEI’s GDP ($512 million)
4
Cavendish Farms Locations
Our plants are
located in North
America’s prime
potato growing
regions.
Cavendish Farms
is the 4th largest
processor of frozen
potato products.
Our appetizer
plant is located
in Southern
Ontario’s key
vegetable
growing region.
5
Cavendish Farms
CAVENDISH
TODAY
ECONOMIC
CONTRIBUTION
– IMPACT ON PEI
Cavendish Farms is the largest private employer on the
Island
Salaries &
Benefits
Potato
Purchases
Other
Spin-off
Effect
$48,546,000 $127,354,000 $54,053,000 $115,000,000
Employment
Full Time: 749
Casual: 76
(2014 data)
Total Contribution to Local Economy
$344,953,000
6
Cavendish Farms
ACRESCAVENDISH
AND VOLUME
TODAY – IMPACT ON PEI
Cavendish
Farms Acres
Pounds of
Potatoes
Cavendish
Produce Acres
Pounds of
Potatoes
Total Pounds of
Potatoes Used
43,000
1.3 billion
5,500
160 million
1.46 billion
Cavendish Farms Supply Profile (approximate
• 5% company grown
split)
• 95% from Island producers
• Total irrigated potatoes: 8.7%
Combined, Cavendish Farms and
Cavendish Produce are the largest
purchasers of raw potato on PEI: 53%
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Cavendish Farms
TODAY
VITAL CAVENDISH
IMPORTANCE - RAW
SUPPLY –
IMPACT ON PEI
Cavendish Farms, in order to have a future on PEI, requires
consistent, cost competitive, quality supply of potatoes
Attributes of Quality:
• Consistent size
• Less defects
• Consistent shape
• Good solids
• Strong recoveries
Improving yields is essential
8
Investing for the Future
2009
2009
2009
2009-2011
APPETIZERS
CAVENDISH
CULINARY
CREATION CENTRE
PROSPECT
POTATO
ENERGY
EFFICIENCY AND
SUSTAINABILITY
• Purchased
Omstead Foods
Appetizers
in Wheatley, ON
• Opened Cavendish
Culinary Creation
Centre and
merged culinary
resources with
Canada’s Smartest
Kitchen
• New $5 million
pilot processing
line
• Cavendish Seed
yielded 18.9%
better/acre
• Less water and
diesel fuel is used
by tractors in
planting, spraying
and harvesting
• Opened largest
bio-gas plant in
North America:
only one in the
French fry world
9
Investing for the Future
2012
2012
2012
2009-2013
NEW POTATO
SEED FARM
A FURTHER
COMMITMENT
TO ENERGY
EFFICIENCY &
SUSTAINABILITY
CAPITAL
EXPANSION
SAFE, QUALITY
FOODS
• Woodstock, NB
• 800 tillable acres
(400 acres
annually)
• Highest quality
seed on the
market
• Converted from
bunker C to natural
gas
• With biogas,
reduces carbon
footprint by more
than 50%
• $13 Million
• New fryer
• New steam peeler
• New crinkle cut
deck
• PEI Plants 1 & 2:
SQF 2000 Level 3
certification
• 1st frozen potato
products
manufacturer in
North America
to achieve
certification!
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Exports
BY INDUSTRY (extract from PEI Economic Forum presentation March 16, 2015)
2014 PEI Exports by Industry
$ (millions)
300.0
250.0
200.0
150.0
100.0
50.0
0.0
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Cavendish Farms
Canada
24%
SHIPPED FROM PEI 2014
Frozen potato products shipped in
2014: 737,758,224 lbs.
United
States
64%
Other
International
Export
12%
3%
2%
Value: Over $400 million
1%
10%
INTERNATIONAL EXPORTS
FROM PEI 2014
United States
Caribbean
Asia
Central America
Other
Frozen potato products exported
internationally in 2014: 561,090,989 lbs.
84%
Value: Over $300 million
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Cavendish Farms
SHIPPED FROM PEI 2014 VERSUS 2015
900,000,000
800,000,000
700,000,000
600,000,000
500,000,000
400,000,000
300,000,000
200,000,000
100,000,000
0
Lbs. shipped
2014
737,758,224
2015:
2015
786,951,415
A projected increase of nearly
50,000,000 lbs.
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PEI Potato Industry
RISK TO COMPETITIVENESS
The industry remains focused on driving improvement, but raw potato remains
the single biggest cost.
A lack of quality and low yields are resulting in costs that are too high to remain
competitive on the Island.
• In the Pacific Northwest, USA, they are producing as much as 63,000 pounds
of potatoes per acre, to our average of 33,000.
• When our growers can’t produce yields, they are forced to increase their price
to meet their revenue requirements.
• Increased costs threatens our competitiveness.
Lower yields resulting from a lack of irrigation is costing growers
approximately $200-300 per acre.
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Estimated Potato Yields
FOR THE 2014 GROWING SEASON
700
630
600
500
400
440
430
480
430
330
300
200
100
0
PEI
Wisconsin North Dakota Minnesota
Idaho
Washington
In CWT/Acres
When yields are low, our growers demand a higher price
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Supplemental Irrigation
WHY IS IT IMPORTANT?
• Lack of irrigation can cause lower yields and lower quality.
• Risk of drought and our ability to grow are concerns when there is a lack of
irrigation infrastructure, or ability to irrigate.
• The availability of supplemental irrigation is key to maintaining a strong,
competitive potato industry.
• Without irrigation to help improve yields and return/acre, the industry on PEI will
find it extremely difficult to compete with the rest of the industry in the US and
Western Canada, where there is extensive growth and new irrigation being
developed currently.
• Scab is becoming more and more of a problem especially as a result of the
inconsistent summer rains. The extended dry spells at the wrong time of the
season are exacerbating the scab problem.
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PEI
Potato
Industry
Thank You
RISK OF DROUGHT
2001 DROUGHT EFFECT ON CROPS
“The drought of 2001 has caused a tremendous erosion of equity on many PEI
potato farms.
The reduced yield and smaller size profile of our crop is devastating to many involved
in the production, processing, sales and distribution of our crop.”
— PEI Potato Board report 2002
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PEI
Potato
Industry
Thank You
2001 DROUGHT EFFECT ON CROPS
YEAR
2000
2001
2002
Seeded area, potatoes (acres)
109,000
107,000
109,000
Harvested area, potatoes (acres)
108,000
107,000
107,500
Average yield, potatoes (hundredweight per
harvested acres)
270.0
172.0
280.0
Production, potatoes (hundredweight x 1,000)
29,160
18,404
30,100
Amount sold, consumed, seeded or fed to
livestock, potatoes (hundredweight x 1,000)
22,543
18,306
29,794
The 2001 drought cost Cavendish Farms $22 million due to the potato import costs.
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New Annan
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Why Supplemental Irrigation?
IMPACT ON PEI POTATO INDUSTRY
With supplemental irrigation comes a higher quality potato:
•
•
•
•
•
•
•
•
•
Less sugar ends
Less scab
More consistent size
More consistent shape
Increased specific gravity
Frying less – less energy, less oil
Higher saleable
Less rework
Higher recoveries
Consistent moisture enables a
healthier plant, and produces
a better quality product.
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Why Supplemental Irrigation?
IMPACT ON PEI POTATO INDUSTRY
Supplemental irrigation increases yield per acre which
pays many dividends.
When more acres are irrigated, it will
increase yield and decrease the overall
number of acres needed to grow the
required volume.
The fewer acres that are used means
reduced chemical use, reduced
fertilizer use, and more acres in
rotation, which are all positive aspects
for the environment, and for the Island.
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Alternative Irrigation Sources
GROUNDWATER
Prince Edward Island has substantial groundwater resources, with an
average recharge rate double the rest of the Maritimes.
PEI Groundwater Use (by sector)
Over 2 billion cubic meters of water is recharged annually.
PEI uses a total of 7% of the recharge rate. 7% breaks into:
• 60% of groundwater used is for
residential
Sales
Residential
Commerical
Livestock
Irrigation
Source: http://www.gov.pe.ca/
• 30% of groundwater used is for
commercial
• 8% is used for livestock
• Only 2% of groundwater is used for
irrigation, of which 1% is for golf courses
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Residential Use
• 60% of 7% of 2 billion cubic meters
• 84 million cubic meters used for residential use
• Toilets use 40% of the 84 million cubic meters = 8.8 billion gallons
• By saving just half of this volume = 4.4 billion gallons
• At 25,000 gal/acre/application this saved water could irrigate
25,000 acres with 7 applications of 0.75” per application
Fact: The #1 use of water on PEI
is a result of flushing toilets
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Alternative Irrigation Sources
GROUNDWATER
• PEI’s groundwater has a very high recharge rate and is barely used
• Reducing reliance on surface water reduces burden on rivers and streams
PEI potato growers understand the need to be good
stewards of the land and to implement environmentally
sustainable production practices.
PEI farmers have the highest level of Enhanced
Environmental Farm Planning in Canada.
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Alternative
Irrigation
Sources
Thank You
CANALS (used in Western Canada)
• Approximately a half million hectares of land
receives irrigation
• In addition, more than 2,700 private irrigation
projects have authorization to use Alberta's
water resources
• They vary in size from two hectares to more
than 10,000 hectares, and together total
more than 112,000 hectares of land
• The Alberta government invests $20
million a year in irrigation infrastructure
• Alberta’s irrigation vision is to increase irrigation
capacity by 70,000 hectares by 2025
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Alternative Irrigation Sources
IRRIGATION PONDS
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Alternative
Irrigation
Sources
Thank You
IRRIGATION PONDS
PROS:
CONS:
• If deep water wells are not an option, then
ponds are the next alternative.
• Construction of the ponds in some cases is taking up
valuable potato land at $4,000 - $5,000/ac.
• If there is not suitable clay at the site, brick clay has
to be hauled in or a commercial liner used at
considerable expense.
• The cost of the pond construction runs at $1,000/ac
up to $2,000/ac depending on the suitability and or
availability of the brick clay.
Irrigation Pond: Shipyard Farm, Hamilton, PEI
• Constructed in 2014
• Holds 2.2 million gallons
• Irrigates a total of 65
acres
• The limitation of only having 1 x 50 gpm well feeding
the pond requires a much larger pond to irrigate the
same amount of acres.
• The premium of the pond over a deep water well is
approximately $1,000/ac - $2,000/ac irrigated.
• If not properly lined, can leak becoming inefficient
and not environmentally good practice.
• Safety and liability become a potential problem with
children, and or malicious contamination.
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Spring Runoff
An option for filling irrigation ponds would be
to capture spring runoff:
• 26% of annual recharge water runs off
• Total recharge = 2 billion cubic meters
• Total runoff = 520,000,000 cubic meters = 136 billion gallons
If we could just capture 1% of this runoff it would equal 1.36 billion
gallons of water.
This could irrigate 7771 acres @ 25,000 gal/acre/application with
7 applications of 0.75” per application.
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Alternative
Irrigation
Sources
Thank You
POINTS OF INTEREST OR CONSTRUCTIVE ALTERNATIVES
Understanding the sensitivity and caution around the deep water well topic, a compromise and
workable solution could be a combination of some ponds and some spring run off capture and
some low capacity wells, with a limitation to the number of wells in a certain geographic or
watershed area.
Cavendish Farms currently works with local watershed groups and will continue to work with these
groups to determine the best location for irrigation ponds.
Data collected from individual watershed areas will decide where/if ponds can be constructed.
Find a reasonable middle ground to capacity out of a well, for example something in between the
extremes of 50 gallons per minute (gpm) and 1000 gpm. Example 200 gpm–250 gpm.
Allow more than one well to feed into a pond. Four adjoining properties could have one well on each
feeding into the one pond. This would be far more environmentally friendly than having four ponds
and naturally far more economical and efficient.
It is imperative to stress that this irrigation is merely supplemental rather than full scale. Depending
on the rainfall 6-8 inches of irrigation would suffice vs. 14–16 inches under full scale irrigation.
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Our Commitment
TO SUSTAINABILITY
Cavendish Farms: Committed to the Environment
Cavendish Farms is committed to effective watershed management and will work with
watershed groups to take environmentally sensitive land out of production.
Cavendish Farms is committed to fish re-stocking and habitat restoration initiatives to
ensure the future sustainability of our fish habitat.
Cavendish Farms is committed to ensuring that all of our growers do their part to protect the
environment and will only contract with growers that abide by environmental regulations.
Cavendish Farms is committed to innovation and processing technologies which reduce the
environmental footprint of our operations.
Cavendish Farms is committed to being a world leader in producing potato products which
have less of an impact on the environment, including those that require less fertilizers and
pesticides.
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Cavendish Farms
RESPONSIBILITY
Cavendish Farms is committed to ensuring the safety and well being of our
communities. The sustainable management of our farming lands is paramount.
We are willing to work with the
Standing Committee, Government,
Scientists and members of the
community to develop agreed
upon governing standards and
procedures to ensure our
groundwater resources are never
compromised.
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Recommendations
• Base decisions on good, sound science and individual watersheds
• Construction of ponds to collect irrigation water
• Capture spring runoff to fill irrigation ponds
• Increase well capacity limits from 50 gpm to 200–250 gpm for
filling of irrigation ponds depending on watershed associations
recommendations
• Continue to allow water to be pumped out of streams in
acceptable times of the year(high spring run off periods or when
flows are above the environmentally safe periods)
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Thank You