Which direction is the potato market going this season? Kees Maas, market expert at DCA answers that question. To do this, he analyzes the run-up to and the circumstances during the season and the expected yield. On the basis of that data, he makes a prognosis for the prices that we can expect.
Growers have abandoned the last hectares with the greatest risk and highest cost. This means that processors have contracted fewer tons and will have to buy more during the year. At the same time, global fries sales are back to pre-corona levels or even slightly higher.
Trend break in area expansion
The potato area has grown over the last 4 years and has kept pace with the expansion of the processing industry. In the Netherlands and Belgium the area is at the maximum. The growth must come from Northern France and partly from Germany. The trend of area expansion has been broken this season. Due to the lower contract price and corona, and the uncertainty that this has caused, the area has shrunk by approximately 5%. Belgium in particular stands out with a significant reduction, but you also see it in other countries.
The potato price is determined by the area multiplied by the yield. It is early September, so we cannot be sure, but based on trial harvesting and satellite images, we expect the yield in the Netherlands to be below the 5-year average. This is due to the cold spring and wet conditions during the season. At times it seemed like good potato weather, but that turned out to be disappointing. Due to the currently warmer weather, regrowth is disappointing and various varieties ripen quickly. In Belgium and France, potato yields appear to be above the 5-year average. For Germany, a yield at the 5-year average appears to be the maximum. Given the current circumstances, we believe there is a good chance that this will not be achieved.
What does the proceeds amount to?
Apart from the yield, there are also a number of complaints about quality problems, such as hollowness, rot and growth cracks. It therefore remains to be seen how many net kilos of this will remain. What doesn't get enough attention is water damage. We estimate that 2% of the area has been drowned or otherwise damaged by extreme weather conditions.
Combining all this data, we estimate the yield in the EU-5 at a maximum of 27 million tonnes. The yield tends to be somewhat lower, given the current (weather) reports.
What does that mean for the price?
The total yield of the 2021 harvest is comparable to that in the years 2015, 2016 and 2019. Prices in those years fluctuated between €15 and €22 per 100 kilos for delivery from the shed.
Until the end of the landing period, we expect prices between €12 and €15 this season. The late harvest of the early and mid-early potatoes and the starting main harvest is putting pressure on the market. In addition, there is additional supply from parties with quality issues, especially hollow in Fontane and Agria.
For the storage season from December to July, we expect a market of between €16 and €25. There is still a lot of room in that prediction. The price will largely depend on the breed. Innovator and Agria will be at the top due to disappointing yields and quality problems (particularly hollow). For Innovator we expect prices between €18 to €25 and for Agria €17 to €23 per 100 kilos. Fontane will be at the bottom mid range at €16 to €21.
We must note that the price forecast started late. It makes a big difference for processing whether the potatoes have to be processed in 11, 12 or 13 months. At the start of this season we saw a clash between the old and new harvest. The connection between the old and new harvest can also create a harmonica effect at the end of the season. We cannot predict that yet, but we do know that we will have started the current harvest 4 weeks later.