U.S. market plays a pivotal role for Ontario producers

06/15/2010 03:03:48 PM
Jim Offner

Currency exchange, politics and competition from U.S. product present challenges to Ontario’s field produce exports, industry leaders say.

“Food is integrated in North America — it’s a most integrated system, even more than automotive,” said Jamie Reaume, executive director of the Holland Marsh Growers Association, Newmarket, Ontario.

That puts an extra heavy onus on Ontario growers and shippers to clear those year-by-year hurdles, Reaume said.

“What’s our biggest challenge besides currency, environmental issues, transportation? Being able to provide the most nutritious food anywhere,” he said. “That’s why we work with food safety protocols. We’re actually way ahead of the game, as far as what’s going on there.”

Constant communication with U.S. customers is crucial, Reaume said.

“You still need to be able to talk with everybody. We call it a value chain up here,” he said. “We have to follow through. If we don’t have the product, where does it come from?”

Ontario production helps make up shortfalls in the states, he said.

“You got snow in Texas, and we didn’t. You got heat in Washington State, and we didn’t,” he said. “We had the driest winter in Canadian history, which is different from what happened last year with the wettest and coldest summer we’ve had. That makes a difference.”

Currency exchange is a key issue to Pier C Produce, Leamington, Ontario, said Doug Pearce, partner in the onion and carrot shipper.

“The exchange rate can really help with export, which is half our business,” said Pearce, whose company ships across North America.

For Vittoria, Ontario-based Scotlynn Commodities, export accounts for about 60 percent of its shipments, said owner Scott Biddle.

“The biggest challenge when you’re exporting products is working with the currency exchange and increased costs for fuel for trucks to ship it,” he said.

Trucking shortages also can bottle up the pipeline across the border, Biddle noted.

“One problem we’re already seeing is a loss of capacity in the trucking business,” said Biddle, who also operates a fleet of 350 trucks. “There are not enough carriers because of the strain the trucking companies went through the last three years,with the decline in the economy. Things are on an upswing, but you’re not going to see enough refer trucks.”

Exchange-rate issues have been a hurdle for St. Thomas-based Whalls Farms, said spokeswoman Chris Falk.

“The currency exchange has really hindered us the last couple of years,” she said. “I think it’s stable now, but it’s not sitting very well for us now as we sell to the us.”

As of May 27, the Canadian dollar was at $1.07 in U.S greenbacks — a three-month high, although it was below the year-earlier mark of $1.12.

The export market is growing, said Falk, who numbered the Safeway, Winn-Dixie and Publix chains among her retail customers.

“We’ve been sending product to them for years, and that’s what’s been keeping us going,” she said. “Kevin (Fuller, the company’s co-owner) has been out to visit customers this spring, and everything seems to be on a positive note.”

Some element of the business will depend on the size of the U.S. crops, said Miriam Worley, co-owner of Chary Produce, Oakland, Ontario.

“We’ve been talking to regular customers and everybody always expects great things in the winter,” she said. “It depends on what happens with the U.S. crop. If everybody’s got bumper crop and has plenty of product, it won’t be good for us.”

The company exports nearly half of its product, Worley said.

“We export, not quite half, but we do a fair chunk of business and hope that it continues,” she said. “The hardest part is crossing the boarder.”

Paul Procyk, president of Procyk Farms, Wilsonville,  Ontario, said the exchange rate can be a major hurdle, but he said homegrown programs in the U.S. also can get in the way of business.

“The big challenge is the exchange rate and the local produce there,” he said. “The U.S. is trying to keep as much local as possible. Our biggest plus we have to offer is our quality and service, which usually does pretty good in the Southern U.S.

“Competition in the Southern U.S. is usually the Northern U.S., but we’re able to put together product that is wanted down there.”

Whatever the problems, shippers have to come up with solutions, said Tony Moro, president of Bradford & District Produce Ltd., wholly owned subsidiary of Bradford Cooperative Storages, Bradford, Ontario.

“I know it sounds kind of backwards, the Canadian dollar being strong, but it limits the affordability,” he said. “In the end, we have to do exports. It becomes a situation where we have customers there, so you have to service your customers, as well.”

Exchange rates and regulations are challenges, said Scott Siemon, co-owner of Stovel-Siemon, Mitchell, Ontario.

“It’s all these loopholes,” said Seimon, a rutabaga shipper. “You get one thing done and you have to do something else. It goes on and on and makes you want to work for the government. Everything is so hard to do.”



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