Once again, a record acreage of ware potatoes is expected in France, despite the potato market having had a bad year. Why are more and more potatoes being grown in France? Boerenbusiness List 4 reasons.
The potato area will grow by 2,5% this year, according to the French Ministry of Agriculture. This brings the total area to 142.000 hectares, approximately 20.000 more compared to 2015. It is surprising that the area is expanding again, because prices were low last season.
The French trade association for the potato sector (CNIPT) and growers' organization UNPT previously called on French growers to make a voluntary reduction in area, due to the fear of a surplus of potatoes. This was not heeded and that is why CNIPT expects further problems with the potato price next season (in good weather conditions). So why are growers still expanding?
1. Low wheat price
An important reason is that the wheat price is currently very low. The increase in the area is therefore at the expense of the wheat area. The French ministry estimates a decrease of 0,7% (compared to last year) to 7,6 million hectares. This is a considerable decrease on the enormous French acreage. Due to grain cultivation, a lot of virgin soil is still available for potatoes.
2. No alternatives
Secondly, there are few alternatives available; In the Netherlands they are available (onions and carrots). Only sugar beet cultivation in France yields slightly more than grain. That is why the sugar beet area also remains high. In addition, they have now invested in the cultivation of potatoes.
3. Growing industry
The main reason is that the demand for potatoes from the French fries industry is increasing. France functions as a hinterland for Belgium. The Belgian industry breaks records year after year. In 2017, more than 4,5 million tons of potatoes were processed, 3,6% more than the year before. The year before, growth of 11% was also achieved.
More than €2 million has been invested in capacity expansion for two years in a row. Belgian processors can easily obtain the required quantities of potatoes in France without traveling many transport kilometers.
4. Growing potato market
Another reason is the growth expectations of the French fries market. High demand is expected from countries such as the Emirates and Asia and France has plans to export more to these countries.
Risks of the expansion:
1. Low throughput
The weak spot of the French potato sector is its processing capacity. The capacity of the 15 French potato processors is 'only' 2 million tons. In the Netherlands and Belgium, the processing capacity is twice as large, with enormous efficiency and the associated low cost price.
Last season there was a dip in French exports to Belgium, because Belgium itself had more potatoes. Yet France showed that it can find alternative sales; especially for table potatoes. For example, more potatoes (more than 300%) went to Eastern Europe.
Exports to the Netherlands also increased last year, thanks to the 'Association Producteurs pour Aviko', which supplied more than 100.000 tons to Aviko Potato. Still, more processing is important for the country, as it is a major producer with a total production of 6,2 million tons in 2017.
2. Surpluses
The area expansions are not without risk, because in the last decade growers have been confronted with a large surplus year with very low prices every 3 years. The reason for this is that, due to increasing production, surpluses also increase in years with good weather conditions.
The solution?
The French and Belgian trade unions: UNPT (France), ABS (Flanders) and FWA (Wallonia) announced to work together. The aim of this is to find alternative sales channels for potato surpluses. That is why the unions want to develop a system whereby agreements can be made in advance for the sale of surpluses.