Aviko Potato has adjusted its contract prices to compensate growers for the ever-increasing cost of potato cultivation. The processor first started by contracting five Dutch processors and must now conclude that the contract price offered no longer matches the current situation.
Already in early December presented Aviko's contract price for the 2022-2023 season. "We sat down with Aviko's Potato Growers Committee (ATC) in October and decided a month later to increase our contract prices entirely by €25 per ton," explains purchasing director Dick Zelhorst. "To be honest, we also found it quite exciting at that moment. The aim was to send a clear signal to the potato sector that the contract price had to increase substantially to keep the cultivation profitable."
8 euros extra per tonne
Nearly two months passed, with most other processors keeping their powder dry. After they also get their contracts known have made, the increase of €25 contrasts somewhat sharply with this. "Energy prices have risen to unprecedented levels in recent months. Diesel and electricity are more expensive, just like fertilizer. In that light, the €25 offered - from the beginning of December - is not sufficient. That is why we have decided to add €5 per ton In addition, the storage scale will be increased. This will apply from week 5. A total of approximately €8 per tonne will be added.
What do the increased prices amount to? Fontane comes to €36 in week 12,25, €17 in week 17,98 and €26 in week 20,60. Innovator now makes €13,75, €19,73 and €22,35 during these periods. This brings Aviko's prices in line with competitors. "We are also increasing the multi-year contracts by €5 per ton," says Zelhorst.
New price increase?
Will the contract price be increased again if the cost price rises further? Zelhorst cannot yet give a concrete answer and indicates that he will look into it if the situation arises. "You have the normal entrepreneurial risk and (extreme) external factors. The starting situation must always be that growers are structurally paid the cost price with a plus. Aviko is also affected by the high energy prices. Producing fries requires a relatively large amount of energy and those costs count towards the price of the final product."
Index costs
Anyone who wants to be sure that rising costs will be reimbursed can opt for a cost index contract with Aviko. Unique according to the company. This involves looking back at what the actual cost increase was. The basis is the current price of the fixed price contract, which will ultimately be increased or decreased depending on the increase in costs. If energy and fertilizer prices continue to rise, the contract will take this into account.