Aviko Potato says it is consciously setting the price of seed potatoes this season, in order to make a difference for their growers. Although the price is going up, the company is trying not to make its growers fully pay for the shortage and the resulting high prices. Contract prices are once again increasing across the board this season.
Seed potatoes are the hot topic in the potato sector at the moment. This also applies to the fixed price contracts for the 2024/25 season. Aviko - like other processors - has multi-year agreements with the seed potato trading companies. Despite this certainty, Aviko also has to dig deeper into its pockets for the starting material, but the processor does not want to pass on those costs to the growers. The fact is that there is simply a European shortage of seed potatoes. This applies to all breeds to a greater or lesser extent and to Innovator in particular.
Limit costs
For Innovator seed potatoes 35-45 millimeters, the company charges a price of €685 per tonne. For Fontane 35-50mm that is €760. This season the factory is forced to purchase more coarse sizes, which means that there will also be a lot more cutting. That worries Aviko. It says it consciously chooses to pass on the higher costs as little as possible. Seed potato delivery to growers is at the service of chip potato cultivation. High seed potato costs are detrimental to crop yields and we try to prevent that. However, it is difficult to expand the area of consumption potatoes in the current situation.
Consumption potato prices for the 2024 harvest will be increased by a maximum of €20 per tonne. This increase is mainly due to the storage season. The off-farm season for the main harvest starts at Fontane at a price level of €175 per tonne. For Innovator that is €195. In week 17 (delivery in April) both varieties end up at €268 and €288 per tonne. At the end of June this will be €295 and €315.
Bottom line result
The prices mentioned do not include all premiums and bonuses that growers can receive for, for example, quality, volume or storage in mechanical cooling. If you take this into account - and take the rates for seed potatoes into account - then the processor expects to arrive at a competitive price level compared to its competitors.
In addition to the fixed price contract, Aviko has the well-known alternatives: the pool contract and fries guarantee contract (click contract). The two-year floor contract is new. The same price will be used for 2024 and 2025. If the contract price increases next year, the price will increase accordingly. Aviko has had this form of contract in France for some time, but it is new for the Netherlands. Growers are not obliged to enter into a fixed price contract when purchasing seed potatoes, but can also choose one of the other three contract types.
Do not grow seed potatoes yourself
The supply of seed potatoes will remain a challenge for potato processors in the coming years, but Aviko does talk about Murphy's law, which affected cultivation last year. A late spring, poor emergence and setting and finally a difficult harvest. Add to that the smaller acreage. The fact is that the area of seed potatoes will probably also shrink this year. This is evident from expectations expressed by the NAK. Yet Aviko sees little point in growing the starting material himself. Growing seed potatoes is a separate discipline for specialized growers and trading companies. The processor emphasizes that high-quality starting material is indispensable for the future of the potato sector. A fair distribution of value in the chain starts with the seed potato and consumption potato grower. According to the processor from Steenderen, that is the basis.