This report examines market opportunities in British Columbia for Alberta produced table potatoes. The report also seeks (1) to assess the cost competitiveness of the Alberta table potato sector, compared with costs of potato production in British Columbia and the Pacific Northwest (PNW) of the United States (US); (2) to provide a preliminary understanding of potential trade flows and trading volumes based on relative cost competitiveness; and (3) to assess the importance of particular potato attributes to table potato buyers in British Columbia. The study also undertakes a description of the environment in which trade takes place between Alberta and British Columbia. This is done to document conditions under which inter-province trade takes place, and to attempt to assess whether trade regulations affect Alberta shippers differently than shippers located in British Columbia. No overt barriers to trade were found. However, some rules do appear to impose different trade practices on potatoes moving across provincial boundaries compared to potatoes that are grown and sold within British Columbia. The study finds that, based on available cost estimates, Alberta producers are strongly cost-competitive in the British Columbia table potato market. However, potato production in the Pacific Northwest is also cost-competitive in the British Columbia table potato market. While Pacific Northwest production dwarfs that of Alberta, application of similar supply functions in the two regions suggests that there is a market for both Alberta and the Pacific Northwest in the British Columbia table potato market. This estimate is made in the context of new, and in our view better than recent past, estimates of the size of the British Columbia table potato market for 1996. These estimates suggest that British Columbia-based producers face serious cost constraints to expanding potato output and that the table potato market in British Columbia represents an opportunity for 51,500 metric tonne to be supplied by competing regions. Finally, the study reports on an assessment of table potato attributes considered important to potato buyers in the British Columbia market. British Columbia buyers appear willing to pay the highest prices for potatoes that are white, medium size, and of British Columbia origin. Potatoes from Alberta and the Pacific Northwest become equally attractive compared to British Columbia potatoes when prices are slightly below those received by sellers of equivalent British Columbia grown potatoes. Study estimates suggest that table potatoes grown in Alberta are valued equally by British Columbia buyers when potatoes grown in Alberta are priced $7.70 per tonne below those of local potatoes, and Pacific Northwest potatoes are valued equally to those grown locally when Pacific Northwest potatoes are priced about $13.90 per tonne below local prices. These estimates should be viewed with caution since (a) they are "best" ones given the levels of confidence of the study results, and (b) they represent a current perception about the desirability of non British Columbia grown table potatoes. Such perceptions may be long-term or fleeting, and may be subject to change as perceptions of BC buyers change with time or with new information.
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Paper provided by University of Alberta, Department of Rural Economy in its series Project Report Series with number
24041.
Length: Date of creation: 1998 Date of revision: Handle: RePEc:ags:ualbpr:24041
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