Agristo price increase delivers net return

Agristo has considerable growth ambitions and makes no secret of them. In 2017 it opened a new chip factory Wielsbeke. Production started with 250.000 tons of potatoes, but this is expected to double in 2019. This also includes a larger potato area. In addition to Belgium, the Netherlands and Germany, more potatoes are contracted in Northern France. Family business Agristo also has branches in Harelbeke, Nazareth and Tilburg.

The main varieties that Agristo works with are Fontane, Challenger and to a slightly lesser extent Innovator. According to Steven de Cuyper, Agro Director at Agristo, Bintje only accounts for a few percent of the total. Across the board, prices have risen by about 20% compared to the 2018 harvest. According to De Cuyper, the price level is even slightly near that of 2017.

Price difference
Agristo will start with the main harvest from the field in week 36. Fontane then yields €11 per 100 kilos, Challenger €11,25 and Innovator comes to €12,50. Bintje quotes €10,50. "We note a small price difference between Fontane and Challenger, because Fontane grows slightly faster on sandy soil," De Cuyper explains. The difference with last season amounts to €2 and €2,25. The difference at Innovator is €2,50.

At the beginning of November, the price is €11,50 for Fontane, €12,50 for Challenger and €13,50 for Innovator (dry from the shed). This increased to €16 at the end of April for the first 2 varieties and €17,50 for Innovator. The difference with last season for this last variety amounts to €2,90 per 100 kilos. Only Fontane is contracted until June. The price is a maximum of €18 per 100 kilos at the end of the season.

Seed potato prices
It is special that Agristo tries to keep seed potato prices stable and in line with last year. "Prices have risen slightly, but we still want to keep them more or less in line with the multi-year average," De Cuyper explains. He does not dare to confirm whether the finer size sorting means that fewer kilos are planted per hectare. "I am not going to make any promises now that we are not yet certain about." However, it does have sufficient starting material to achieve an increase in area.

The design and conditions in the contract remain the same as last year. "These are transparent and simple in design for our growers in Belgium, the Netherlands, Germany and France," says the potato man. These are tonnage contracts with fixed prices and without a return obligation. Agristo pays out from 35 millimeters.

Growth ambition
De Cuyper does not expect the potato area in Belgium to decrease this year. "I estimate that a maximum growth of 5% is possible (good for 5.000 hectares). Then Belgium has 100.000 hectares of potatoes and that is simply the maximum. Looking at the available land and taking into account a healthy crop rotation, more is not possible "That's why we are increasingly active in France."

Contracting started a little earlier this year. The early contracts, which were presented at the end of November, are now gradually being finalized. The new harvest starts 1 to 2 weeks earlier, to fill the expected gap between the old and new harvest. The company does not offer multi-year contracts, but consciously renegotiates with the grower every year and says that this is appreciated by their relations.

Sector-wide approach
The conditions remain the same, despite the discussion that arose last summer. "We cannot change anything in the short term," De Cuyper explains. "As far as we are concerned, this is a long-term issue that should ideally be taken up by the trade organization that is to be established. A sector-wide approach must be achieved. Each factory can then add its own nuances to the established guidelines and advice. The legal framework is very important. You can quickly invent new rules now, but the following year they turn out not to fit. Every year is different because of the extremes we see. An 'ad hoc decision' is not appropriate."

Don't growers start negotiating about irrigation compensation? De Cuyper finds it difficult: "Those who have their soil condition, crop rotation and optimal fertilization in good order and irrigate, achieve an average higher yield and therefore a higher return. Higher cultivation costs are therefore certainly rewarded. We have looked at it, but what is irrigation? that 1 time 20 millimeters or 5 times and at what time? That is difficult for us to determine and check. We can say that the significant price increase for the early harvest is precisely a translation for, for example, an irrigation payment. That is why we argue for a uniform approach in the sector."