| In times troubled with Covid, war, climate changes, environmental issues, etc…which have a serious impact on day to day life, we should have a deeper look into the consequences for agriculture in general and potato processing in particular. Where do we stand and where are we going to ? According to the latest NEPG (North European Potato Growers Association) figures, the output of fresh potatoes is going down in spite of an increased acreage of potatoes planted. With 512 400 hectare there was an increase of 2,9% or 14 421 hectares, whereas the yield per hectare came down by 6,3%, resulting in a total output of 21,69 million tons or 1,2 million tons less than in season 2020/21. |
At the same time processing capacity was extended in massive figures, so that the hunger for more fresh potatoes is dominant and leads to considerably higher prices on the spot markets.
The necessity for processing factories to continuously feed their processing lines on a 24/7 basis throughout the year is reflected in the prices offered to farmers for contracts covering the entire season 2023/24. In order to convince more farmers to grow potatoes and existing suppliers to plant more acreage, prices offered have gone up by 30-40 % !
It is expected that for the season 2023/24 some 500.000 tons extra fresh potatoes will be required to cover the extended processing capacities that will be(come) active by that time.
Potato growers are facing a number of factors which can no longer be denied and which mean a brutal breach with the past.
- climatic changes have caused a much higher frequency of long, hot and dry summers, leading to considerable loss of yield per hectare in the past 10 years;
- the access to irrigation waters has become a bottle neck, as governments consider society problems as being of a higher level, than agricultural needs; water has become a cost price factor;
- environmental rules and presence of nitrates in the soils are limiting or abolishing the use of fertilizers and pesticides; do yields of 60 tons per hectare belong to the history books ?
- the traditional anti-sprouting agents are no longer allowed and alternatives are by far not as efficient as the chlorpropham containing products were, hence a lot more waste;
- lack of rotation of cultures on the same soils reduce yield and increase risks for diseases and harvest failures;
- shortage of cereals, mainly wheat and corn, linked to the situation in Ukraine, encourage flour mills to considerably increase the prices offered to farmers, creating serious competition with the culture of potatoes, which enhances a lot more risks and costs (growth, keeping free from diseases, warehousing in temperature controlled barns, etc…);
| Important conclusion as formulated by the NEPG (quote) : |
Higher contract prices could stimulate higher potato hectareage as well as bigger contracted potato volumes. Seed growers, starch potato growers and table potato producers could partly switch from their current productions to produce potatoes for crisps or chips. These developments could lead to profound imbalances throughout the whole of the potato sector.
Seed production costs have risen and there is no indication that buyers will increase the price they pay for seed. This could lead to less seed production during the 2023 season.
The seed sector could lose at least 5.000 ha, which would lead to shortages and higher prices for consumption growers in spring 2024. Here also, the problem has to be dealt with by the sector and not only by seed and consumption growers….
Reading between the lines it means that low prices for any type of potato products, fresh, frozen or dehydrated, belong to the past and customers, consumers will have to learn to live with the “new normal”.