The potato area in Poland is showing a sharp decline this year. That is the expectation of insiders based on current information. Potato growers are tired of growing potatoes at current prices when grains offer an attractive alternative. A correction to the acreage is therefore inevitable.
There is always a lot of discussion about the correct acreage figure in Poland and last year this debate increased even further. Official figures from the Polish Potato Institute mention an acreage that is just above 322.000 hectares. Government data does not extend beyond 230.000 hectares. In addition, there is home cultivation in people's backyards. An estimated 20.000 to 30.000 hectares. The idea is that not every grower registers his potatoes in order not to be checked for, among other things, bacterial diseases.
Substantially smaller potato harvest
The Polish potato harvest was disappointing last year with 7,4 million tons. A decrease of 1 million tons compared to the previous year. It was especially dry in the north and east of the country. In the southwest, a lot of rain fell, causing the potatoes to rot. The market in the country has been ordinary so far. Not bad, but certainly not good either.
Processors of French fries in Poland – mainly Farm Frites, McCain and Fritar – did increase their contract prices at the beginning of this year. Subsequently, input costs continued to rise and there was growing dissatisfaction with the prices offered. This resulted in farmers joining forces for Farm Frites in northern Poland and decided not to handtekening to put. Growers report that the contract prices offered have been slightly increased several times, but not enough. A number of growers have therefore decided to grow the potatoes freely this season. Farm Frites did supply the seed potatoes and therefore has the right to first purchase.
Area down sharply
Polish arable farmers who do grow potatoes this year are positive about the market for next season. Percentages of 20% to even 30% are mentioned with which the acreage can decrease. Growers large and small are tired of it after years of sapping. Much more rapeseed and winter grain was sown last autumn. This spring, more maize will go into the ground and experiments with sunflowers are underway. Summer cereals were also in great demand. There are fewer costs involved, less labor demand and the prospects are good.
The cultivation of potato chips in particular is taking a hit. Chip factories do not get the more expensive products worn by their customers. Retail will throw them off the shelf if necessary. That's what Edeka/Biedronka did at PepsiCo. In their own words, not to make consumers pay for the higher costs. Industry sources report that the discussion has now calmed down somewhat and that deliveries will be resumed shortly. The fact remains that the contracts have at least increased in price. This, together with a lot of risk and low returns, means that growers prefer to switch to French fries or not grow potatoes at all. Chip factories hope to make up for the shortage with more imports from Germany.
Only Polish product
The table potato market has been declining for years and is expected to stabilize next season. Polish supermarkets have committed themselves to only put Polish products on the shelves. This offers opportunities now that imports mainly from France are disappearing. Potatoes of a slightly lesser caliber are also in demand at reasonable prices.
Farm Frites/Aviko in Northern Poland and McCain in Southwestern Poland both produce chips for the Russian market. The former for the many McDonald's restaurants, all of which are now closed in Russia. A lot of product also goes to Ukraine. The demand for chips from these destinations is now at a standstill, or has dried up considerably. Reportedly, other sales destinations will absorb this. According to insiders, it has not been possible to place all contracts with growers. How the processors deal with this is unknown. More free potatoes will be traded next season, but lines may run less efficiently and that also has its (financial) consequences.
Low moisture reserves
Spring in Poland has had a special start. The winter was very dry and so was the month of March. In the meantime it has also become very cold in the country, but no significant rain has fallen so far. The prospects remain for the time being with cold weather, which means that it may turn into a late spring in dry conditions. It is again a disadvantage for potato cultivation in the country, which is already having a hard time.
After the disappearance of the United Kingdom – and even before that – Poland has become the fifth largest potato producer in the EU-5. The export of table potatoes and potato products to Ukraine is an important one. It is, after all, a neighboring country. A smaller production can therefore come into balance when the demand also falls proportionally. Nevertheless, there are still sufficient sales opportunities on the broader European market. In that sense, a growing Polish potato sector is shooting itself in the foot this season.