Potato Inc Case Study

INTRODUCTION
Manitoba extends 761 miles (1,225 kilometres) from the U.S. border to the Northwest Territories with a total area of 160 million acres (64.8 million hectares). The land area is 135.3 million acres (54.8 million hectares), of which 36.2 million acres (14.6 million hectares) or 26.6% have some agricultural potential. Over 23.6 million acres (9.6 million hectares) of this area are non-organic soils and 13.5 million acres (5.5 million hectares) are suitable for sustained annual production of cultivated crops (Honey and Oleson, 2006). Manitoba's rich soil and clear skies – plus the energy and innovation of its agricultural community – allow a province with four per cent of Canada’s people to produce about ten per cent of the nation's

This is a major decision which the farmer must make. However, this decision will be based on the kind of market the potato is meant for. The kind of potato variety required by such market and which generation of seed to plant. In most cases the buying companies e.g. McCains, will have a contract with the farmer on what they want the farmer to grow and the specifications. However, two major markets can be identified in the Potato value (supply) chain, viz: table market and processing market. The varieties for the table markets are predominantly the red types e.g. Norland, Ac Peregrine, Sangre, Norkotah, Burbank and Viking; while the processing (seed) market are mostly Russet Burbank, ranger, shepody. Government regulations require that any one growing more than 2 acres must use certified seed (Province of Manitoba, 2012). All these are major inputs into potato value

This regulation authorizes Peak of the Market to pass certain orders and regulations controlling the marketing of potatoes produced in the province of Manitoba. Potatoes grown under a preplant contract with a specific processor for processing crop processing on their premises are exempt from these regulations and orders. However, marketing in excess of the contracted volumes for processing (surplus) does fall under the regulations and orders of Peak of the Market. At the present time, Peak of the Market has entered into an agreement giving the processing associations (Keystone Vegetable Growers Association and the Chipping Growers Association of Manitoba the authority to act as Peak of the Market’s agent to sell surplus potatoes destined for the processing market only.
Peak of the Market is a non-profit corporation under the direction of nine members elected by registered producers. Five members are potato producers, one is a member at large and three are root crop producers. Peak of the Market operates as a central selling desk, with growers delivering produce based on a quota and delivery system. Peak of the Market also sells non quota and surplus quota potatoes on a direct price basis to markets outside the quota market area (MITC,