Potatoes: there are either way too many, or way too few. This results in severe fluctuations, which are directly reflected in price formation and in the market. However, the processing capacity shows a stable to increasing trend. This raises the question: which European potato yield fits the current processing lines?
Achieving an optimum in area, yield and processing is virtually impossible. If only because of the growth climate or the entrepreneur himself. The market goes up and down, but it is still interesting to compare the figures, with the little information we have now.
Increase in area
Saying anything about the yield now, while the main chip varieties have barely been planted, is a shot in the dark. The averages must therefore provide a theoretical indication. We can speak with a little more certainty about the potato area. The sentiment in the potato sector in Northwestern Europe is that the total surface area for chip potatoes will increase. Growers' organization NEPG (North-Western European Potato Growers) recently reported about this and the market experts at DCA also expect growth.
The NEPG is cautious with the estimate, because they talk about an increase of 5% to 1% for the EU-2. This means a maximum of 607.500 hectares of ware potatoes. DCA market experts expect growth of 3% to 5%, based on data available in mid-March. This brings the flag to the border of 647.000 hectares, including in Flanders rises the area is considerable. It will also become clearer in mid-April that the supply of seed potatoes is not an obstacle.
Theoretical yield
When we look at the average yield over 5 years, it amounts to more than 48 tons per hectare. This includes the extremely low year 2018, but also includes the abundant 2017. So the data is quite mixed. Based on the above figures, this theoretically yields 29,22 million tons to even 31,1 million tons of potatoes. For comparison: in 2017 this was 29,3 million tons from 620.600 hectares.
So much for the theory, which shows what a possible scenario could be and which at the same time is not based on truth at all. A dry summer or wet autumn determines the yield in Europe, with a maximum fluctuation of 30%.
Differences in races
The figures include the yield of both chip potatoes and table potato varieties. It is extremely difficult to draw a clear line between these product groups. This is also because there is also a category of 'dual-purpose varieties' that is used more, especially when there is a shortage of starting material. The starch potatoes and seed potatoes have not been taken into account. These varieties also influence potato availability. The cultivation of table potatoes in Europe (the United Kingdom is an exception) is expected to decrease, which will benefit the French fries sector.
The potato processing industry has clearly focused on growth. New factories are being built, expanded or optimized. New cultivation areas have also been tapped, expanded and contract prices have been increased. Partly because of this, the expected area increases. However, which figure fits the current state of processors? An investigation of Boerenbusiness shows that this is just as difficult to predict as the figures regarding area or yield.
How big is the capacity?
Inquiries from insiders show that the estimated processing capacity in Europe is 15 to 17 million tons of potatoes. Analyst firm AnnualInsight deals with these figures for the chip manufacturer. They confirm these numbers and are at the bottom of 'our' obtained information. It is difficult to determine a hard figure, because the processing industry is developing extremely quickly.
When Annual Insight started collecting the data in 2011, processing was at a level of 12 million tons. In the following years this grew to 13 million tons and a capacity of 2019 million tons is expected for the 2020/15 season.
Efficiency
In addition to building new processing lines, we are also working hard to increase existing capacity and improve efficiency. In 2000, the capacity of 1 processing line was 10 to 15 tons per hour. Almost 20 years later this is already 30 to 35 tons per hour. The average return is now 60%; 1.000 kilos of fries are cut from 600 kilos of potatoes. The remaining product is sold as animal feed (such as steam peels), flakes or, for example, rösti. Every percent gain in efficiency yields almost 100.000 tons of end product for the entire sector.
Dutch potato processors such as Farm Frites, Aviko, McCain and Lamb Weston/Meijer in our country are mainly focusing on this efficiency drive, which is far from over. This also happens in Belgium, but there is also a lot of construction going on there. Agristo opened a new factory in 2017 and will double production this year (good for 800.000 tons of potatoes). Clarebout expanded production at their existing sites in Nieuwkerke and Waasten.
The Clarebout effect
Clarebout has the opportunity to significantly increase processing capacity. The new planning talk about a mega factory in the Walloon town of Frameries. According to reports, up to 2.300 tons of fries could be produced there per day. You are then talking about a total raw material requirement of up to 1,4 million tons. It remains to be seen how feasible the figures mentioned are. Construction has not yet started and cannot rely on much support to calculate of the local population.
The Belgian processing figures, recently provided by Belgapom published show that the Belgians put their words into practice. The growth figures are phenomenal. In 2018, more than 5 million tons of potatoes were processed and in 1 year the processing capacity increased by almost 12%.
Capacity in Benelux
The Dutch potato industry processed more than 2018 million tons of potatoes in 4, which is also a record. Collectively, the Benelux accounted for 2018 million tonnes in calendar year 9,13. The expansion plans and improved efficiency have ensured that this will increase (according to insiders) to 2019 million tonnes in 9,5. This does not include figures from, for example, Avebe and Rixona.
Outside the Benelux, it is the German industry that is growing the most. The Northern French potatoes are largely processed in Belgium. Poland is now outside the EU-5, but is actually a more important supplier than the United Kingdom. This island is a world in itself, while Poland serves as a supplier for potatoes that are brought to the Benelux or Germany. Insiders do not see local processing increasing much.
Conclusion
Back to the key question: which European potato yield suits the current processing lines? More than 29 million tons of potatoes for just under 15 million tons of processing is too much. The 2017/2018 season already showed this. A hectare yield of 50 tonnes, based on the estimated potato area, is disastrous for price formation on the open market. If we calculate with the 2018 yield figures, a total of almost 25 million tons is better balanced.
With these figures in mind, you can conclude that there is potentially a surplus of 14% in the market. However, in practice it turns out differently. Whether there is anything to be gained from free potatoes depends on how the penny falls. The line between profit and loss is thin, but based on the expected area, not positive.