Broadly speaking, the offer for the 2017 harvest from the Belgian-Dutch Agristo corresponds to other potato processing parties. Although these all indicate that they can use more raw material, this applies even more to Agristo. The new factory in Wielsbeke will become operational on 2 October and must be supplied with raw materials.
The main crop sees a price increase of around 10 percent compared to last year. The increase is greater in the early segment. 'The demand for new contracts in the early varieties is such that we are increasing the level of the fixed price contracts by more than 20 percent', says group purchase manager Steven de Cuyper. 'The biggest increase is in early July.'
Agristo, which started in Harelbeke in Belgium in 1986 and later opened production sites in Nazareth (B) and in 2001 in Tilburg (NL), is adding the new location in Wielsbeke. In order to fill the increasing capacity of 200.000 tons of processed product, Agristo must expand its raw material procurement.
Uniform prices and conditions apply to Belgian and Dutch growers. On land, Fontane pays 10,50 euros per 100 kg, Challenger 10,50 euros, Bintje 10 euros and Innovator 11,50 euros. The November price for these varieties is 12 euros, 11 euros, 10,50 euros and 12 euros respectively. In April this amounts to 15 euros for Fontane and Challenger, 13,75 euros for Bintje and 16 euros for Innovator. At the end of the season, June 2018, Agristo charges 17 euros for Fontane/Challenger and 15,50 euros for Bintje. It concerns tonnage contracts without premiums. The French fries company has never calculated weighing costs.
'For the time being, we will stick to the tonne contracts with fixed prices. Simple and transparent.' Agristo does not operate a system of which a return obligation is part, but puts the relationship first and therefore assumes that consumption will return.
Long-term relationships also play a role in the distribution of seed potatoes. “The supply is very tight. This year others are also knocking on our door for seed potatoes, but we are already having trouble supplying existing customers with seed potatoes. I expect that eventually it will be possible to fill in the contracts, that there will be sufficient seed potatoes available. But answering the question of others is a different story.' Incidentally, De Cuyper keeps the seed potato price of the strategic varieties stable.
As an alternative, the Belgian also uses other varieties than the traditional ones. 'However, we fear that growers will plant varieties that are not so suitable for chips.' There are no major shifts in breeds. 'There is some growth in varieties from smaller seed potato houses that have been running for a few years now and are allowed to grow further.' Fontane is and remains the largest variety within the company. This is followed by Innovator and Challenger. The other 5 percent are other races. A substantial part of Bintje is also processed in Harelbeke.
Reasons for the plus in fixed price contracts are based on the same factors as other processors indicate. The high daily price in the current sales season, the increasing processing capacity and the demand for potatoes. 'We also see that growers are struggling with a rising cost price. However, there is great interest in growing potatoes. Growers prefer to plant more than is available in seed potatoes, says the group purchase manager. According to him, this also has to do with the fact that other crops are not doing so well financially this season.
Although the expanded capacity requires more potatoes, Agristo keeps the share of contracts the same as in the past two years. The rest must come from the free market. 'It is about looking for a healthy balance. It is clear that unbridled growth is not possible. The seed potato shortage limits that.'