Does America satisfy the European French fries hunger?

European chip producers have aimed for world dominance in recent years. In many cases this has been successful. Belgium and the Netherlands top the list, with Germany, France and Poland following to a lesser extent. The reason? An enormous availability of high-quality product for a low price. It is not without reason that countries rely on anti-dumping to protect local manufacturers.

Too expensive and not for sale
This year, however, the cards have been shuffled differently. The EU-5 is struggling with a significantly lower potato harvest. This is disastrous for the European chip potato grower, who grows an average of 70% of his potatoes under a fixed-price contract. The situation is not much better for factories. Free potatoes are expensive and in many cases not even for sale. Then there is the issue of quality (continuous washing) and the finer sorting compared to other years.

The price difference between the US and Benelux remains. Fries from America are 20% to 30% more expensive, compared to the Netherlands and Belgium. This season, that difference is likely smaller, but not to an extent that would bring major changes. About 4 seasons ago the difference was even smaller, because then it was less than 10%. Since then, Belgium in particular has managed to expand its position. The export volume of our southern neighbors, but also of the Netherlands, has more than doubled on the world market compared to the Americans.

Price advantage
An important advantage for processors on this continent is the exchange rate of the euro. The factories can afford to buy expensive additional potatoes. The US dollar is very strong. That position is only increasing, while the damage to the Turkish lira is also dragging the euro along with it. In 3 months, the euro has lost almost 8% in value against the dollar. This makes the value virtually the same as that of 2 years ago.

(Text continues below the chart)A low exchange rate for the euro is favorable for the export of fries.

However, the same applies to the American potato industry: the potatoes have to be there. A first a prognostic shows that the yield is approximately the same as in 2017. Contracts are currently being brought forward in certain growing areas to ensure that the supply of potatoes does not stagnate. Yields are lower than normal due to an unfavorable spring and dry summer. However, nationally, the yield is not significantly lower.

Growing weather
Cool and humid weather, expected to last into the second half of August, will bring better growing conditions. So far the summer has been warm, which costs kilos. Quality is also a concern for some. However, the distribution is sometimes uneven. The large potato areas are well into their harvest, while small states are struggling with a shortage.