Ontario processing cucumber dealings switch to US dollars

Friday, April 22, 2016

by SUSAN MANN

The minimum prices for Ontario’s processing cucumbers are in U.S. dollars this year for the first time as part of the negotiated settlement reached with buyer Hartung Brothers Inc.

Al Krueger, executive assistant with the Ontario Processing Vegetable Growers, says the prices are in U.S. dollars because the buyer is based in the states and sells to customers that are also mostly in the states.

The U.S. pricing “does add another layer to growers’ management here in Ontario because they now have to be aware of what is going on with the U.S. dollar,” he explains.
However many growers already keep track of the American dollar because they grow corn and soybeans and there’s a U.S. dollar component in the basis.
 
Another change this year for cucumbers is the Chatham agreement is different than the one for eastern grading stations in Alymer, Port Burwell and Vienna. That’s because  “of the different factors that are influencing the Chatham area,” he says.

The minimum prices (all in U.S. dollars) at Aylmer, Port Burwell and Vienna are based on size and range from $700 a ton for No. 1 grade to $20 a ton for nubs and crooks. At Chatham, the prices are also based on size. The No. 1 grade price is just $20 a ton while the No. 2 grade is $360 a ton and for the No. 3 grade it’s $215 a ton. For No. 4 grade and nubs and crooks the price is $20 a ton.

The Chatham hand-harvesting price is different than the other grading stations because the bulk of the cucumbers received there are machine harvested. That means the volume of No. 1 cucumbers is very low and “from the buyers’ perspective they’re more difficult to deal with than they’re worth,” he says.

With the No. 1 price at Chatham of $20 a ton, “no one is going to want to pick a No. 1 at that price,” he says.
 
According to 2015 preliminary numbers posted on the processing vegetable growers website, there were 124 contracts last year with 26,480 tons contracted and 29,411 tons harvested. The gross farm value was slightly more than C $11 million.

Cucumber planting begins around the third or fourth week in May.

As for how Krueger would characterize negotiations for the various crops this year, he says they were tough as they were in previous years. However, they were also efficient and productive.

“We were able to get agreements this year in every crop,” he says. “There was no need for arbitration in anything.”

The two sides agreed “on the things that matter with respect to the negotiations,” he notes.

Francis Dobbelaar, chair of the processing vegetable growers board, agreed that negotiations went “quite well” this year.

Dobbelaar says “everybody has a great deal of respect for each other at the table so everybody comes with their information readily at hand.”

Price discovery isn’t as contentious as it used to be, he notes. Price discovery is the growers’ and processors’ ability “to find out what the competitive price in the North American regions are.”

For green and wax beans, sweet corn, lima beans and tomatoes the prices are the same as last year. The price for carrots went up. Dicer prices increased by $1.75 a ton to $100 a ton and slicer prices went up by $3.50 a ton to $131.25 a ton.

There is a two per cent increase in pea prices this year compared to last year.

For tomatoes, some processors are looking to increased volumes this year, “which is probably a good thing,” Krueger says. BF