This week the potato harvest continued at a rapid pace. The first potatoes of the main harvest are now also appearing and in the various potato growing areas more plots are starting to turn brown due to the spraying of the storage potatoes. Innovator in particular seems to have had its day. Many plots have now been sprayed to death.
However, it is becoming quieter and quieter on the physical potato market. The 2023 harvest had started at record high price levels of €50 ex field. How different is that right now. Belgapom recorded €15 today (September 12,50), which is another step down, with a dull mood.
This means that for the first time this season the quotation has fallen below the price of the contracts. After late spring and a dry month of June, no one would have thought this possible, but now that the market has turned 180 degrees, the situation is different. The late start of the harvest has created a bulldozer effect. The field harvest that is normally processed in four months now has to be processed in three months. In addition, most processors have concluded many contracts, which means there is no room for extra (free) potatoes.
Belgapom's listing is only an indication, selling potatoes for that is still quite a challenge. Processors and traders are not at the market and first get rid of their contract potatoes. Supplied kilos must be priced and the quotation is used for this purpose.
Sentiment changes
The fact that the mood would change so much has to do with several factors. Firstly, the late start of the harvest season. Secondly, the extensive coverage in processors' contracts. Thirdly, the steep growth curve shown by various test harvests is largely responsible for this negative market.
The latest trial harvests also show that there will be an above-average harvest in the EU-4. The growing months of July and August have resulted in enormous catch-up. And with this the harvest is heading towards a volume that is useful for many processors. Add to this that there are many quality problems in potatoes such as phytophthora, hollow and rot. This will create a compelling supply in the short term, meaning that processors will (expectedly) have little access to the market until February.
High expectations
A number of grower organizations report that a large potato harvest is indeed coming (the area has grown and the yield appears to be above the five-year average), but that this should not be a problem due to the expansion of processing capacity.
This creates an expectation that there is a safe bottom in the market. But is that expectation correct? The processing capacity may be there, but chip sales will have to keep pace. In recent months there have been some signals that some hairline cracks are showing in the sales of the end product. And that also makes processors cautious about purchasing potatoes for the long term.
For now, the most important thing is that the backlog in the market will be eliminated and that breathing space will become available again. Another important factor is that many growers are going to take risks with the harvest. By leaving green longer and starting harvest later, the harvest risk will increase substantially. And that does not mean that all those kilos that are still in the ground will actually end up at a final boss.