'Contract price must rise with the market'

At the end of December, Gerrit Jan Wesselink – a German with strong Dutch roots, who has worked for Emsland Group since 2004 – and Lambert Vette are busy taking stock of the 2023 growing year. Vette is not only chairman of the Erzeugergemeinschaft (EZG), a grower's organization. focused on starch and flake potatoes, he also has an arable farm with his daughter where starch and flake potatoes are grown. Wesselink has also been on the harvesting machine a number of times this year. "Last Saturday they had to pull me out three times while harvesting potatoes," he laughs.

No regrets
That fact characterizes the attitude of the potato processor, who claims to be close to his growers. “We believe in creating synergy and benefiting from it together,” says Wesselink. "This means that in financially difficult times the growers give us some space. If the organization is doing well, then we should also pay out." It is also the reason why Emsland is paying out support for the difficult harvest this year. Storage and transport fees have also been increased. Wesselink: "A grower should never regret his agreement with us afterwards."

Vette and Wesselink find it difficult to give exact figures about how many potatoes are still in the ground at Emsland growers at the end of December. Less than 5%, they both agree, although individual growers have sometimes been hit hard. "The late spring brought with it many problems afterwards," Vette says. "Because of the late season, we were only able to start harvesting late. Even if we had wanted to start earlier, it was simply not possible." Wesselink agrees. “In the beginning we even had processing problems in the factories, because the foliage did not detach properly.” "You would almost forget it, but we also had a long dry period," Vette continues. "August was wet again. It also led to flooding in Germany, although it differed regionally. Furthermore, the disease pressure was extremely high. We clearly noticed the consequences of a too tight package of crop protection products."

Professional knowledge is lacking in politics
The gentlemen are concerned about how this should be done in the future - with increasing resistance to existing remedies. Wesselink: "Some time ago I was in discussions with politicians in Berlin. Unfortunately, some of them lack professional knowledge. I told about the famines in Ireland due to the dreaded potato disease. It will probably only occur when potato prices have risen explosively due to a shortage."

Keep sharp
The EZG is closely linked to Emsland, but its members are not obliged to sell the potatoes exclusively. In practice, this often happens, because of the close ties. A grower for the factory in Emlichheim can become a member of the Erzeugergemeinschaft after approval from the organization. The advantage is that the EZG sometimes also supports growers financially. As a grower, you need shares in the factory to supply. It pays €400 per share for this. Starters are supported. Emsland pays a guaranteed minimum dividend of five percent on these shares. The dividend for 2022-2023 will be 12,5%, provided this is approved at the annual meeting.

The EZG consults with the board of Emsland Stärke, the starch branch of the company. Vette explains: "Our members have traditionally been starch potato growers. The working area extends around the factory in Emlichheim to Cloppenburg, 100 kilometers from the border." The total operating area of ​​Emsland Group's eight factories runs from the Netherlands to the Polish border. In addition to starch potatoes, flake and granulated potatoes are processed, as well as peas for the production of vegetable protein. Wesselink finds working with the EZG very pleasant. "It puts you very close to your growers. They keep us on our toes. If there are any problems, we solve them together."

Net result counts
In the Dutch-German border area, the company notices the ever-growing competition from flake and chip potatoes, but also from other high-yielding crops such as onions. “We can close our eyes to it, but it is reality,” says Wesselink honestly. "The contract prices offered, especially for fries, are at a high level for us. They have risen explosively in recent years. We can paint a rosy picture of the future for growers, but that will not win them over. Ultimately, the net result counts! This means that we We have to keep up with the market. We have close relationships with our buyers, so they also understand that raw material prices are rising. Starch potato cultivation is shrinking in Europe. I am firmly convinced that the market regulates itself. If the cultivation disappears, prices will rise. That has to be the case. Growers are really not crazy. They know what is paid by all parties in the market. That is why it is our top priority to secure the supply of raw materials with a good contract price."

"I don't need to make a huge profit, but I want to earn an honest living," Vette continues as a potato grower soberly. "I am working on a new tractor and planting machine for next year. With all the options on it, you are talking about an investment of half a million euros. Whether I grow starch or chip potatoes, the price is no less. We simply cannot settle for less. If you add up all the price increases in cultivation, you will notice how capital intensive potato cultivation has become. The growers have become real specialists. The number of members of the EZG is steadily decreasing, but the acreage remains the same. Average companies are getting bigger. This is necessary in order to be able to bear the financial risks. The downside is that in a season like this, the large companies often still have potatoes in the ground. There are also limits to growth. Fortunately, I notice positivism among our members , especially among the younger generation."

Double factory capacity
The exact contract price Emsland will provide for its starch, flake and granule potatoes will become clear in early 2024. Wesselink can report that the intention is to significantly expand the capacity for flake production in Emlichheim - the main location. "In fact, a factory will be added. We are now busy with the preparations, such as the building permit. We need more potatoes for the new factory. We are looking to expand our area in a large radius around Emlichheim. Despite the competition in this area, it remains an ideal place to grow potatoes. We are proud that we have always been able to grow with the demand of our customers. We want to continue to do so." Vette also grows flake potatoes on his farm. "French fries potatoes sound tempting, but it is not possible on all soils in this region. It requires more work and that is why the contract prices are logically higher. There are still good opportunities for flake and starch potatoes. Growers know this too."

Outsource logistics
Emsland is growing steadily in the Netherlands. The EZG also has Dutch members, whose interests are being represented very well, the chairman thinks. "They have the same wishes and requirements." It is typically German that most growers bring their potatoes themselves. "We are very flexible with the planning. Growers are allowed to make a few deliveries every week, depending on the size of their contract," says Wesselink. "Yet we are receiving more demand to organize the transport ourselves, both from the Netherlands and Germany. We started experimenting with this last harvest year. We are satisfied with the outcome." As a grower, Vette agrees. "Staff is becoming increasingly difficult to find and keep. In the past, there was always a family member walking around to deliver a load. That is no longer the case. By having a transport company carry out the loading, you free up labor for other work."

This season, Emsland also experimented with a so-called 'potato mouse'. A converted variant of the well-known beet mouse, which can quickly load and clean a complete heap in the field. However, self-transport remains possible, Wesselink emphasizes. "This flexible attitude is characteristic of Emsland. We certainly want to keep it that way."