Drought and its consequences for potato cultivation are also an important theme at the Weuthen Kartoffeltag. "The potato industry has been in crisis for four years now," said Weuthen director Ferdi Buffen during his opening speech at the event. His solution: a less speculative market.
“Normal doesn't seem to exist anymore,” says Buffen. After three years in which corona dominated the potato market, it is now drought that rules the market. 2022 will join the ranks of 1976, 2003 and 2018 in terms of precipitation deficit. This causes uncertainty about the availability of sufficient potatoes. It comes on top of concerns about the availability and price of energy, transport and fertilizers. Yet Buffen does not expect a major shortage of potatoes. The industry is very economical with its stock and even this week several thousand tons of good quality from the 2021 harvest are still being processed. Furthermore, the director of one of the largest potato trading houses in Europe points to an expansion of the area. The potato area has been expanded by 2% compared to the 2021 season, and there have been important shifts in cultivation goals. The share of chip potatoes has grown at the expense of seed potatoes and table and starch potatoes. In his forecast, Buffen assumes a German harvest of between 9,25 and 9,50 million tons. For the EU-4 plus the UK he expects a harvest of 24,25 to 25 million tons. According to Buffen, that is just enough to meet demand. There are extreme differences in yield between irrigated and not. Buffen also warns that the potatoes still need to be harvested. "The main crop has yet to be harvested. A year's average rainfall can come at once, hopefully not too much during harvest."
Stretched leg
Buffen makes a few striking statements regarding market expectations. He expects moderate demand for potatoes from mid-September and possibly declining prices. The supply will probably dry up quickly, because the prospects are good further into the season. He expects prices between €27 and €32 per 100 kilos for chip potatoes from storage in the coming season. These statements seem to be at odds with each other. How far can prices fall before farmers stop supplying them? Belgapom is at €25 and PotatoNL is quoted between €20 and €27 per 100 kilos. Is the grower prepared to fill the shed for that relatively small difference instead of delivering immediately? Especially if you take into account the sharply increased prices for energy and sprout inhibitors, the risk that the grower runs all the time with the potatoes and the tight liquidity position at various companies.
Buffen's longer-term vision is even more interesting. "This year's harvest will influence the contracts of the future. The current grain and rapeseed prices, together with the extremely high costs for fertilizers, personnel and energy, are the main arguments for a fair contract design for the coming harvest. Even though the digital media suggest otherwise, professional growers do not need a speculative market, but attractive and regulated raw material flows." He does argue for a fairer distribution of value in the chain. If you look very cynically at these statements by Buffen, it actually comes down to the fact that contract farming is not beneficial for the farmer. Instead of doing less under contract and more freely (where the market can do its work), it effectively boils down to: we need to regulate the market more, with the buyer determining what the farmer can ultimately earn, or what he has to contribute.