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'Contract price must be at least 25 euros'

21 November 2022 - Niels van der Boom - 2 comments

The cultivation costs for consumption potatoes will rise to more than €10.000 per hectare next season. The Producers Organization Consumption Potatoes (POC) calculates this on the basis of its own balance calculation. For a fair reward and proportionate risk distribution in the chain, the contract price must be at least €25 for delivery in April, it says.

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Earlier this year the POC that the break-even point for ware potatoes compared to winter wheat was €320 per tonne. That has now dropped to €300, the organization says. "We used the NAV cost price calculation for this," explains POC secretary Johan van der Eijk. "The previous calculation dates from April. We have now updated it. The costs of, among other things, fertilizer, diesel and mechanization have all increased this year. That is why growing wheat is becoming interesting more quickly. In the calculation we have taken into account that you also have to with fewer hectares of potatoes, you will have part of the machine costs."

7 euro price increase
POC made this comparison based on last season's contract prices. It is clear that they will increase before 2023-2024, but the exact price levels remain uncertain for the time being. The POC calculated that a minimum payment of €25,20 must be paid for delivery in April in order to achieve cost-covering cultivation, plus a 15% margin for the grower. That is an increase of about €7 compared to the price level this year.

In the cost price calculation that POC itself presents, the price increases for fuel and fertilizers are particularly striking. These increase by 36% and 21% respectively. In concrete terms, this means that there are €123 extra for fuel and €150 in fertilizer costs per hectare. The crop protection products item is increasing less rapidly in percentage terms, but in absolute figures it is increasing by €142.

The energy item does not seem to increase much per hectare, but in the end it amounts to €170 per hectare. In addition, fewer growers have a permanent contract for their electricity. Ultimately, the cost price calculation is different for every grower. The POC therefore tries to create awareness, says board member Jacco de Graaf.

Risks
"The construction plans have largely been finalized in September," says Van der Eijk. "A contracting period that starts at the end of the year is actually too late. You already want to know where you stand. You enter into a fixed price contract to cover risks, but such a contract also contains risks itself. With today's weather extremes - which cause erratic yields - the question is how many kilos you harvest. In recent years, irrigation has become standard rather than exception. The costs for this are not included in the calculation example. If we do, they will increase the costs certainly exceed €10.000 per hectare."

The POC tour started in South Limburg on Monday, November 21. In the last two months of the year, the producer organization travels throughout the Netherlands to explain to growers about the POC and the potato market.

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