For the coming season, but also for the following seasons, changes will affect the balance of potato cultivation. The use of plant protection products is under a magnifying glass. Will the potato grower in harvest 2020 be rewarded for taking greater risks?
The use of crop protection products is increasingly restricted, especially when killing foliage. And now that Chlorine IPC can no longer be used, long-term keepers must turn to alternatives, such as MH60 or 1,4SIGHT, and the installation of supporting cooling. Potato cultivation will entail different costs for them.
A possibly much more drastic risk for the crop balance is the costs. These increase every year, partly due to the restriction of substance use. But the costs of renting land and the costs of purchasing machines and seed potatoes also increase every year. And what about the deployment of skilled personnel? In addition, irrigation has been a permanent part of potato cultivation in the past 2 growing years, which increases costs by €200 per hectare.
First contract prices
The growing season will determine whether market prices follow this trend. The first contracts in circulation (a major Belgian processor) for the 2020 harvest year show that little or no account is taken of the expected higher cultivation costs. For example, Fontane 35 mm upwards is paid €2020 in the first half of October 11,20, compared to €11,50 last season. For delivery in the first half of February 2021, this is €14 equal to the current season.
Cover only in March
Only from March onwards (€15,50 second half of March) will more money be paid for 35 mm up Fontane than in the current season (€15,20). If delivery is made in the first half of May 2021, €17 will be paid out compared to €16,40 this season (first half of May 2020). The same price range can be seen in the Innovator variety. €2020 will be paid out for the first half of November 14, compared to €14,50 in November 2019. This price will increase to €17,50 in the second half of March 2021, compared to €2020 in the same period of 17,20.
The trend for the coming season is therefore a 'slightly' higher payment price for potatoes from storage and an equal to slightly lower price (in the case of the aforementioned Belgian processor) for potatoes from the field or potatoes with a short storage period. And not unimportant: seed potato prices hardly differ from last year.
Note editors/DCA:
The statement in the article “Futures market harvest 2020 is remarkably high” where it is indicated that the futures market for crop year (2020 contract) was trading between €14,50 and €15,00 per 100 kg around this time of year is incorrect! The April 2020 contract was worth €17 last year around this time (New Year's Eve). The futures contract for the coming harvest year is currently clearly lower at around €15,80.
The incorrectly provided information arose because in the years before the 2018 harvest year, futures market quotes for the new harvest actually started below the €15 level. The increase was then prompted by arguments such as a lower acreage or a late spring. The 2018/2019 season was an exceptional year in terms of prices, with the futures market even peaking to €2019 in the first weeks of 33. This price development had a direct impact on the futures market for the then new harvest, which, as mentioned, stood at €2019 at the beginning of last year (17).
With the start of the new harvest futures market (season 2020/2021), the old harvest futures market is certainly not negative, but with a current quotation at the beginning of January around €18,50, there is no exceptional price formation.