Somewhat later than usual, the processors in Europe are partly switching to new potatoes. The supply of old potatoes and the maintenance that a number of factories are doing in peace, ensure an extremely difficult start to the new season.
The accumulated stock of end product - due to the stagnation caused by the coronavirus - even provides a dramatic starting position. The formation of a market price is apparently impossible during this period, because there is no demand for free potatoes. Probably for that reason it was not possible on Friday, July 17, for the committee that composes the Belgapom to arrive at a listing.
Market price indication
The hectare yield in the early cultivation areas of Europe is average to above average, which means that there would have been sufficient supply anyway, partly due to the expansion of the area of the early cultivation areas, especially in Belgium. Due to the corona problems, things are not getting better. According to PCA/Fiwap, an indication of a market price was around €5,00 per 100 kg at the beginning of this week, but insiders indicate that this market price is not traded. About 3,00 per 100 kg from grower seems to be more of a reality.
The problem of the processors not running at maximum capacity (reportedly still 80%) is essential, which is why the start of the new season does not want to get underway. It is precisely the failure to fully utilize the processing capacity due to stagnation in sales that can make the difference in the market and price formation.
Focus on price of old harvest
Unfortunately, but logically, the focus in terms of pricing of the new harvest is on the price level of the old harvest. The market price of the 2019 potato harvest has remained around €2,50 for quite some time, but the price has come under even further pressure. The demand for feed potatoes is decreasing somewhat because livestock farmers have less need for feed due to the growing weather.
An extra cut of grass can sometimes be brought in against expectations (it was extremely dry in the spring). Corn crops are also doing well (look at the Boerenbusiness roughage tour), which does not help the feed potato market. This week, feed potatoes traded between €1,00 and €2,00 per 100 kg were collected.