For example, the potato harvesting is progressing well, a lot of work has been done this week. According to estimates, approximately 41% will still have to be harvested in the Netherlands at the end of week 40. The same picture can be seen in France and Belgium. According to the estimates, the potato harvest in Germany and England has progressed further.
In that sense, the harvest is progressing better than the 2020 harvest season, when 60% of the harvest still had to be harvested in Europe in the middle of the second week of October. In Belgium and France in particular, only 15% was within.
The yields appear to be variable, but the general picture is that the multi-year average is not being achieved in the EU-4 countries. As a result, the expectation in terms of price development for later in the storage season is positive, given the forward quote for the April 2022 contract that closed on Friday 15 October at €21,00
What does the price do?
Today, the physical potato market is quietly cabled through. The prices that are made are mainly potatoes that are supplied, which are established on the basis of stock exchange quotations.
It seems difficult to determine what the real price of the potatoes is, since there is hardly any actual free potato trade. Growers attach more value to trucks at the plot than they are concerned with the market price. Every now and then a 'white raven' comes flying over and needs free potatoes of a certain variety, sales and specification. And then it turns out that it is not always easy for the free potatoes. For example, last week a batch of Innovator was made for €25 per 100 kilos dry from the shed. A price that is in stark contrast to the €13,50 per 100 kilos ex-country.
Whether €13 is the truth or €25, that remains the question. Perhaps €25 per 100 kg is the price for free potatoes and €13 is the market price for potatoes with a logistical agreement behind it. Who knows may say.
Few free ones on the market
The fact remains that relatively few free potatoes are available or are traded. According to PotatoNL, the daily price of the potatoes with which a delivery agreement has been made is settled. On the futures market, they want €21 per 100 kilos for delivery in April 2022. A relatively high premium compared to the average quotations in Europe. A custodial fee of €7 for seven months of storage.
Incidentally, there is a discussion in the market about the storage costs, now that the electricity price has risen explosively. For farmers who have not fixed the electricity price or whose contract is expiring, storage can be quite expensive. These extra costs cannot be included for contract potatoes. Whether the free potatoes are rewarded for the extra costs seems to be reflected in the futures market.
Is the grower interested in potatoes?
The issue with regard to the cost price is also clearly reflected in the quotation for the futures market of the April 2023 contract season, which is already at €18,40. A quote without any reference, as we don't know what contract prices the industry will come up with for harvest year 2022.
The concerns for the new growing season are not small. The costs are extremely high due to, for example, the price of fertilizer (CAS €62 per 100 kilos), diesel (€ 1,40 per litre) and the price of crop protection products may also rise sharply. And a futures market for wheat with delivery in September 2022 at €240 per tonne, looks like an ex-land price of €225 per tonne. If growers in Europe opt for wheat, this could be at the expense of the much-needed acreage of potatoes. This may mean that for the second year in a row we will see a shrinkage of the acreage of potatoes in Europe.