A very erratic shower pattern in Northwest Europe has so far brought little relief to the crops. Still, a slightly cooler weather with possible precipitation will bring some calm to the market. Whether that is correct remains to be seen.
Last week the rain and thunderstorms fell in a very erratic pattern, in the Netherlands but also in the countries around us. Locally there was brief flooding and hail damage. Significant showers of up to 70 millimeters or more fell, especially in the eastern Netherlands. Locally, the south of Limburg also had to deal with similar showers.
Weather extremes
In Belgium, rain fell mainly in the border region with the Netherlands, but it was limited to a small amount of rain on the already very dry coast. In Germany and Austria, a combination of hail and precipitation caused crop damage. The damage in Austria to corn and grain crops is estimated at €1,6 million estimated according to the hail insurance. Heavy rainfall also caused damage in Germany last week and heavy showers also fell on Monday.
In the meantime, growers are watching the crop development of their (french fries) potatoes with suspicion. Most crops for the main harvest have not yet closed the field, although flowering has already started. This means that foliage growth will soon end and the plant will focus on tuber production, while the leaf apparatus has not yet fully developed. It is clear that this will cost revenue, but how much is of course the key question. The late-planted plots in particular - and there are many in Europe - are having a hard time.
through washing
What is the status of the early potatoes in the meantime? Things are not going smoothly there either, although the differences are large. The potatoes planted in early March in the southwest are reportedly doing well, despite emergence problems. Problems with flushing are also reported. Early potatoes are also doing well in the South-East of the Netherlands. There is a good chance that a gap will arise between the very early chip potatoes and the mid-early ones.
In addition to cultivation, there are also some concerns about the pricing of both the old and new harvest. Yesterday (June 26), PotatoNL announced its latest – virtually unchanged – quotation for the 2022 harvest year. With at least eight weeks to go until the new harvest hopefully arrives in a large volume, the question is who will determine the current market price. Should that be €30, €50, €60 or more? Judging from the input in the PAT Index and the Transaction App it still concerns a very small volume of free potatoes that are traded.
Sector without futures market
The same applies to the new harvest. While the price of the April contract on the potato futures market is normally the indicator, the sector now has to make do without any indication. Edwin Burgers already wrote one in 2018 opinion in which he outlined what a world without a futures market could look like. Unfortunately, that situation has now almost become a reality. There was a price on the boards on Monday, but with a turnover of three contracts it is difficult to take that seriously.
The most important motivator of the potato market probably remains the weather forecast. The real summer heat has disappeared for the time being, but with values between 20 and 25 degrees it remains warm in Northwestern Europe. There is hardly any significant rain. The current weather models struggle a lot with the weather developments in July. There is a good chance that there will be more thunderstorms that can produce a lot of precipitation locally, but also hail and gusts of wind. This can provide relief to the crops, but it can also certainly be a burden. Potato cultivation benefits little from this on a large scale.