The contracting of the chips potatoes for the 2021 harvest is about to start or has started at some processors. According to the Producers Organization for Consumable Potatoes (POC), it is therefore now important to think carefully about what you do with your potatoes that you supply. Look beyond your company and reason in the best interests of the sector, is the advice.
Last Monday, January 11, the POC sent a statement calling for consideration to no longer automatically supply free potatoes outside the fixed price contract. What exactly does the organization mean by this?
Calculable
"Factories determine between 50% and 75% of their potato needs in advance with fixed price contracts," says POC board member Keimpe van der Heide. "In many cases, the so-called co-delivery potatoes are sold at the daily price on the day of delivery to the factory. They go with the truck when the contracted potatoes are delivered. Factories can take this into account and therefore do not have to enter the open market. By not doing this automatically By doing this you create market forces. That is good for the entire sector."
"Factories usually do not oblige you as a grower to supply these potatoes to them," says Van der Heide. "Except in cases with very specific varieties that only 1 processor purchases." According to the organization, growers should look at the importance of the potato sector. The foreman explains it this way: "For an individual grower, the decision to supply the potatoes may not be that big, but all those volumes together do make a difference. It is therefore a choice in the great interest." The POC talks about waking up 'the sleeping giant'. A term used in connection with the Japanese attack on Pearl Harbor, when it entered the United States into World War II.
Considered decision
Both the POC and Hylke Brunt, secretary of the processing association Vavi, say that growers are free in their choice. "Growers make a well-considered decision that suits the company. You take a risk with free potatoes and everyone covers this risk in their own way." The POC does not say how growers can best cover this risk. That is up to the entrepreneur himself.
"The aim of our message is to get growers thinking, after all, contracting is about to start," says Van der Heide. The POC expects that the volume of excess kilos will amount to 15% to 25% of the total Dutch potato harvest annually. This volume acts as a shock absorber in a rising market, because processors can draw on this stock for a long time before they have to enter the market.
More trade
In 2019 did Boerenbusiness research into the sales strategy for potatoes of 250 Dutch and Belgian potato growers. This showed that 45% supplied half the excess kilos on the daily price. 30% said they market them themselves during the season, 15% supply them to a pool and almost 10% use the futures market to hedge this risk. During the same study 10 years earlier, 60% still delivered their excess kilos at the daily price.