Last season, Farm Frites integrally increased its contract prices by €1,50 per 100 kilos. Due to an exciting connection between the old and new harvest – after the extreme year 2018 – the ex-land prices of early potatoes were increased significantly. This will be phased out again for the 2020 harvest.
Farm Frites is one of the processors that sources early potatoes from Bordeaux, France to connect the old and new harvest. The company has increasingly specialized in this area. Last year, 15.000 tons were sent to Oudenhoorn between the end of June and the end of August achieved.
Price reduction ex country
This means that the processor can afford to reduce the price in the primeur segment, as shown by contract prices that Boerenbusiness got his hands on. Just like last year, the field harvest starts in the second half of week 26 (end of June), with a price of €18,50 per 100 kilos. This means a reduction of €2,50 compared to last season. This price decreases - until week 39 - with a bottom of €9,50 per 100 kilos. In addition to Première and Sinora, Felsina, Zorba and Lady Blanca will also be processed from week 30. The price for this breed group starts at €15,50.
In week 35, Farm Frites will start (just like 2019) with the field delivery of the main harvest. The basic price between week 35 and week 44 for Fontane is €9,50. The price for Innovator is €11,50 and Agria is €11,25. For Fontane this means a reduction of €0,25, which is an additional reduction for Innovator.
Increase with longer storage
For week 17 (end of April), the price of Fontane is €14,95 (+€0,65) and that of Innovator is €16,22 (+€1,12). At the end of June (week 27) these prices amount to €17,47 (+€1,17) for Fontane and €18,75 (+€1,70) for Innovator.
From week 20 (May 11), Farm Frites will pay a surcharge for potatoes stored in mechanical cooling. The extra fee – on top of the storage fee – starts at €0,10 per 100 kilos and increases to €1,10 in week 30. Fontane and Innovator thus arrive at a price of €18,27 and €19,55.
All prices mentioned are per 100 kilos and for a size grading of 40 millimeters upwards. Seed potato prices were reduced last year and remain at the same level.
Multi-year price agreements
Last year, the multi-year contract was replaced by a rolling contract. This will also be offered for the next 3 harvest years. This means that for the 2020 harvest, 50% of the contracted volume will be fixed at a fixed price. For the 2021 and 2022 harvest, this is a maximum of 33%. With the rolling contract, a plus of €0,25 per 100 kilos is applied on top of the basic price.
In addition, Farm Frites has its futures market contract (click contract) and the 4F price system. 50% of the price is formed by the contract price and 50% by the average closing price of the futures market. The floor price on week 17 for the 4F contract has also been increased. Fontane is at €14,95 and Innovator at €16,25.
Deviating conditions
Growers can contract a maximum of 40 tons per hectare. Anyone who is a so-called dual supplier and also supplies the same variety to other parties cannot conclude a hectare contract. The processor then works exclusively with a tonnage contract. This prevents discussion about the remaining volume outside the contract.
Farm Frites has been given the opportunity to respond to this article. This option has not been used.