With the extension of the closure of the catering industry and the ban on events and festivals by the government, it becomes clear what everyone was already afraid of. This crisis will not just pass and will have an impact much longer than previously thought possible.
It is clear that the sales of French fries potatoes can no longer be resolved this season. There are surpluses due to a drop in demand and a large part of the potatoes still behind the shelves do not end up at the intended final destination. Even when a number of emergency measures are lifted, the demand for fries will not immediately return 100%. Governments are allowing catering establishments to reopen in phases. Something that is now also happening in China.
This means that demand will not completely return before the end of this year. In a tour among chip processors and potato traders, the call for planting fewer potatoes is becoming increasingly clear. In particular, the cultivation of potatoes from the field for direct processing would have to shrink sharply to avoid immediately creating a surplus there as well.
Renegotiate
A number of processors and traders are actively renegotiating previously made price and volume agreements. It is also possible to return the previously purchased seed potatoes. Growers are advised not to plant potatoes or to plant significantly fewer potatoes. Growing potatoes can easily cost €5.000 per hectare, so if there is no demand from buyers it may be wiser to opt for a cheaper cultivation. This is under the credo: the first loss is the best loss.
Larger growers are now also trying to cancel leased land and are finding great understanding from landowners for this. A grower reported that the land lessor's choice is to 'stick to the agreement and not get paid the rent or to look for a solution together now'.
Growers underestimate urgency
Also in Germany, Belgium and France Similar voices are heard, reporting that growers sometimes do not understand the urgency of the situation and think they are safe with a purchasing contract. If the crisis continues, customers will ultimately no longer be able to meet their obligations (financially) and the potato chain is on the eve of an implosion. A trader indicated that a 50% reduction in the farmland area and a 30% reduction in the storage potato area should provide sufficient relief.