We take stock with the presentation of the fixed price contracts for the new season by six potato processors in the Netherlands and Belgium. The following conclusions can be drawn:
The chip makers are unanimous about the reasons for the increase. They all mention the larger processing capacity, the current relatively high potato price, the expected scarcity of raw materials, especially in spring 2017, and the increased cost price for growers. Although the prices quoted per variety and per delivery week are not directly comparable, the common denominator is that early potatoes can count on a higher price than the main harvest. And the long-term holders are also benefited more than the other crops.
Not for the first time, the offer from the Belgian industry is higher than the Dutch processors offer. Also has other years Boerenbusiness that has been observed, but why this is the case is a matter of guesswork. It is possible that Dutch growers can obtain additional benefits through the conditions and contract forms, which are quite a bit more extensive within Dutch chip factories. Dutch industries do provide a greater variety of options within the different contract types. For example, all industries have a click contract form and new contract forms have been developed such as the new F4 contract from Farmfrites, there is the PPP system at McCain and the Aviko pool also remains a good alternative for growers.
Is the increase really worth it? Fixed prices were further reduced for the 2014 harvest, after rising the year before. There was also no increase in 2015. This year there will be an increase in the contract price, but the seed potatoes are more expensive. As a result, the gross balance will ultimately not be much higher than in previous years. The kilos will have to make do, together with cost control in cultivation.
It is striking that part of the Dutch industry has tinkered with the conditions to make them more favorable to growers. For example, surcharges can be earned on tonnages, parties are more likely to benefit from better quality due to a reduction in quality surcharges, certain costs are sometimes waived and there is no deduction of potato tare at one processor. An attempt to interest growers in a fixed price contract. The multi-year contract is also being taken out of the closet, which means there can be an advantage in a longer commitment.
Every potato is one, seems to be the credo of the chip factories this season and also for next season. No potato should be wasted. Loyal growers are desperately needed to have specific varieties available at specific times. And preferably through fixed price contracts. The processes in the factories have been optimized and expanded in such a way that more is possible with lower quality. Thanks to advancing technology, much more is possible than in the past. Previously only 50 mm upwards was welcome, later it became 45 upwards and now it is already 40 mm. By mixing and blending, all batches can be used and growth cracks and other quality issues are no longer an obstacle to producing fries. However, we do not see this reflected in the contract conditions.