Cavendish Farms announced Monday it will be closing its fresh produce packaging facility in O'Leary, P.E.I., due to a shortage of potatoes.

The closure will affect 40 employees, according to a news release.

The company says it will be concentrating on the frozen potato processing business on the Island going forward with potatoes being routed to the frozen potato processing plant in New Annan.

'Difficult business decision'

According to the release, the O'Leary facility will still be used for raw potato storage, and will provide seasonal employment.

"Cavendish Farms has had to make this difficult business decision based on ongoing demand, and limited availability of potatoes on the Island," said Ron Clow, general manager for Cavendish Farms in the release.

Cavendish Farms declined an interview with CBC.

'It's gonna hurt'

O'Leary Mayor Eric Gavin said the closure will undoubtedly affect his town.

"It's gonna hurt because that means there's that many people who are going to have to go somewhere else to get work, and that might mean there are people who might have to move away from here."

Losing jobs also hurts the Island's chances of attracting new residents, he said.

"If there's no jobs — and it doesn't make a difference if it's O'Leary or Charlottetown or Summerside or where it is in P.E.I. — if there's no jobs, people are not going to move here."

Potato shortage

According to the release, the company has been importing potatoes from New Brunswick, Manitoba, Alberta and Maine to make up for a shortage of 150 million pounds in 2017.

"This practice is not sustainable. There simply aren't enough potatoes on P.E.I. for both our lines of business," said Clow in the release.

The company added the industry on the Island may not be able to compete in the frozen potato export market without "supplemental irrigation."

"The Island cannot afford to have its largest export product entirely dependent on rainfall," the release said.

'Fields are at a critical stage'

United Potato Growers of Canada general manager Kevin MacIsaac said the decision could have been based in part on how dry July has been on the Island.

Some areas have only received half an inch of rain this month, he said.

"Fields are at a critical stage right now. There's not a lot of rain in the forecast. So they may be looking at that and assessing the potential yield for this fall."

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