by WENDY OMVLEE
If early negotiations are any indication, it looks like the prices farmers will receive for Ontario’s processing vegetable crops are on their way up — way up.
“Soya beans and corn are absolutely driving processing vegetable prices,” says John Mumford, general manager of the Ontario Processing Vegetable Growers.
While the price for cucumbers was already established in December 2010 at up to $840/ton for number one cukes, the price for green peas was set Feb. 16. The marketing group is satisfied with the price they received for peas as they saw a price increase of 32 per cent over last year’s price. There are fewer than three processors for peas. Phil Richards, the Processing Vegetable Growers’ chairman, said the end price is confidential because of the low number of processors.
The price for sweet corn, settled late February, is $95.75 per ton, an increase of about $20 per ton over last year’s price. The late planting price premium is also up this year to $5 per acre per day compared to last year’s $4 per acre per day.
Mumford commented that there is typically very little shifting in regards to going into vegetable production from grains and vice versa. The number of processing vegetable acres grown stays relatively constant from year to year. Farmers see value in diversification, and often grow both processing vegetables and grains anyway.
The higher prices will give farmers options as to what they would like to grow, because almost all crops are increasing in value, giving farmers lots of opportunities, he adds.
The price adjustments in the vegetable industry are very volatile. “There are double digit increases and decreases, which the growers must manage,” Mumford explained, “the OPVG would rather see more gradual changes when it comes to pricing in the vegetable sectors.”
The volatility in pricing is a concern for processors, because they too must see that they keep and maintain contracts, and a minimum acreage is required to do that, explained Mumford.
There are 13 tomato processors, but Bonduelle Ontario Inc. is the only processor for peas, corn, lima beans and green beans. When asked if this caused any concern Richards conceded that, “yes, there is some concern, but given the fact that peas increased 32 per cent over last year, it shows us that Bonduelle is a good corporate citizen and serious about doing business with us.”
Richards stated that the settlement deadline for prices for processing sweet corn was Feb. 22, tomatoes March 1, cabbage and carrots March 7, peppers March 8, beets and cauliflower March 21, lima beans March 22 and green and wax beans March 22.
The growers’ association falls under the jurisdiction of the Ontario Farm Products Marketing Commission, therefore, if by 4 p.m. on the deadline day for a given vegetable a price is not met, then the negotiations go to “final offer arbitration.” This means that each party submits a final offer, which goes to an arbitrator who must pick one of the prices. The arbitrator cannot take a middle ground between the two prices or come up with an average of the prices. Both the processor and the marketing association must be able to defend the prices submitted. For example, explained Richards, “competing jurisdictions must be kept in mind. How much would it cost for processed products from California plus transportation?”
Annually, the growers’ association negotiates the prices, terms and conditions for 13 processing vegetable crops on behalf of its 600 growers with processors such as Campbell Company of Canada and Smucker Foods of Canada Corporation. BF