With the new sales form F4 that Farm Frites will be introducing in the 2017 season, the processor mainly wants to appeal to new growers, but also offer an alternative for existing growers.
4F stands for Farm Frites Future Floor. 'The 4F system is set up in such a way that growers who are used to participating in a pool also feel comfortable with this new form of contract and can spread the pricing over a longer period. Like the pool system, 4F runs for a longer period of time with pricing based on an independent exchange.”
Half of the contract is based on a fixed price, the other half on the closing quotations of the potato futures market during the season (July-April), which includes a price floor. 'The system contains a floor price for the Innovator group on week 17 of 100 euros per ton. The Fontane group has a floor of 90 euros.'
The other half is determined by the average closing quotes on the EEX from July 2017 to April 2018; the last slot concerns the cash settlement. 'In total there are 200 closing quotations, the average of which ultimately determines half of the payout price. There is a grading scale forward or back April 2017. Those who deliver earlier will receive a reduction, those who deliver later will receive a surcharge.' Incidentally, Farm Frites pays an advance price on delivery before week 17 and an additional payment is made at the end of the term.
Two conditions apply. Only growers who deliver their potatoes between February 1 and July 31 can participate and there is a maximum of 40 tons per hectare. 'If we buy on the futures market, they also have to be delivered in the meantime. That must be guaranteed,' says Boer.
The system seems fairly simple. 'It was also our intention to keep it simple and to offer growers an alternative to the existing pools. This new form is actually very transparent and accessible.'
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