The Polish potato sector has been in flux for decades. The last 3 dry years and a difficult sales season as a result of the corona pandemic certainly contribute to this. Arable farms would like to continue growing with potatoes, but are looking for opportunities to increase their yield. This changes cultivation.
Last season there was hardly any winter in Poland - just like in the Netherlands. The current season had a significantly better starting position. The mercury even briefly touched -20 degrees. That is the 'old normal' that Poles are used to. The starting position was therefore better at the start of this spring. The spring has so far been approximately the same as that of the Netherlands. Persistent cold weather and sometimes heavy frost at night. The differences within the country are sometimes large.
Quarter to paw
At the end of April and the beginning of May, significant rain fell for the first time this spring. About 60 millimeters in the southwest, which brought the work to an abrupt halt. In the north the rainfall was not too bad, but more planting was needed there. Insiders estimate that at the beginning of this week about a quarter of all potatoes still had to be planted. That is later than in the previous 2 years, but not very extreme. Planting was also done quite late in 2018. It is mainly the large companies that are still driving. In Northern Poland, a lot of seed potatoes still need to be planted. Growers have been waiting because of the cold weather. In the southeast, it is mainly French fries potatoes that still have to be planted.
Crops that were planted a month ago are not doing much due to the cold weather. This is especially a problem for early potatoes. Around Poznan - where the early crop cultivation takes place - there is frost damage that sets the harvest back. Elsewhere in the country the damage is not too bad. For seed potato cultivation, there is concern that the crops will not be able to develop sufficiently before the first aphid flight is detected.
Area decreases slightly
Insiders estimate that the total area will decrease by several percent this season. Last season, many growers sought refuge in table potatoes, but they are now disappointed. Market prices have been bad all season. Higher prices for wheat, corn and rapeseed have not caused growers to decide en masse to switch their cropping plan. It is possible that slightly more corn will be sown this spring.
Last year the total potato area was 328.000 hectares. An increase of 6% compared to 2019. For this year, the Polish agricultural institute IERiGŻ-PIB takes into account a total area of 310.000 hectares. That means a decrease of 5,4%. As mentioned, this decrease must mainly come from table potatoes. There is a small decrease in chip potatoes and the area of chip potatoes is stable to slightly increasing.
In the Southwest, processor McCain – which is the dominant player there – has not encouraged growers to contract less. Farm Frites/Aviko has done that in Northern Poland, according to insiders. The Polish chip producer Fritar from Krakow is also cutting back slightly this season. That is not surprising, because growers have less confidence in the buyer. Last summer they were unpleasantly surprised when the company suddenly lost the fixed volume in the fixed price contracts halved. The factory has taken care of everyone, but trust has suffered.
Problems at Intersnack
Insiders know that there are also problems at the Polish potato processor and chip producer Intersnack. After the harvest, growers were told that the company might not be able to meet its obligations due to its financial position. Growers suspect that this has to do with losing a major customer. It ensured that the contracted potato chips were still in storage months after the agreed delivery date. Growers therefore lack confidence to continue growing this season.
Chip potato growers may have found an alternative with Pepsico's Frito-Lay. This global concern - and producer of the well-known Lay's, Walkers and Cheetos chips - is reportedly going to build a new factory in the southeast of the country. It already has a factory there. The company is therefore looking for area for 2022. The new lines are said to be operational in 2023, although nothing has been officially announced about this yet. Despite the troubles, Insiders expect the chip area to remain the same and chip potato growers - dissatisfied with the return on contract potatoes in recent years - to switch to chips sooner.
Corona situation is improving
Sales of chips and potato snacks have weathered the corona pandemic well. Sales of fries are of course a lot more difficult as a result of the closure of catering establishments and lockdowns. This spring, Poland is getting back on its feet thanks to appropriate action. Last fall, the number of infections increased explosively. A quarter of the population has now been vaccinated at least once, which means things are moving in the right direction.
The table potato market is also changing. This is not new but an ongoing process in Poland. The population is moving from the countryside to the cities and modernization is changing consumption patterns. This means less home cultivation and more shopping in the supermarket, where only washed table potatoes are sold. Customers require different product specifications and many traditional growers cannot handle this.
No possibility to invest in storage
It is the large professional cultivation companies that remain in this market. The (long) storage remains an issue. Arable farmers often have a good handle on cultivation, but delivering quality all year round is a challenge. This is why potatoes are now being imported from Germany and new harvests are being imported from Spain, among others. The price levels of last and this season also do not offer an opportunity to invest in storage.
Not only Polish potato cultivation, but the entire agricultural sector is changing. For example, a lot of attention is paid to the European Farm to Fork strategy. In the next 7 years, more money will be invested in the sector than ever before, it is said. This should further modernize companies and, in particular, allow them to take steps in sustainability, and also in organic cultivation. The goals are comparable to those in the Netherlands. Potato growers probably have other things on their minds. 3 dry seasons have had a major impact on the balance sheet. Attention is therefore focused on irrigation. Not only with the reel, but increasingly also with pivots or drip irrigation, which is used on a large scale.