Concerns about the further course of the growing season are and remain extremely great. After the largely drowned harvest period in 2023 and the wet winter, several plots of land that should grow potatoes this year did not emerge unscathed. Now there will be another spring in which it will not get dry.
To date, not all potatoes have been planted, with growers in Belgium lagging behind the most. It is reported that at least another 50% should be planted there. Not unimportant for the Belgian processors, who have something to crumble in the milk! Growers spread across the EU-4 countries who have already planted are experiencing a lot of inconvenience and damage to the crops. In that sense, there is great despondency among growers and many are not enjoying being an arable farmer at the moment.
The question that arises, but which many interested parties do not seem to be really concerned with yet (first let's get the potatoes going if that still works), is what all the malaise in almost all EU-4 countries will do to price developments. doing. The mood, given the contract prices for the 2024 harvest year, was not bad, but now that part of the harvest per hectare may not materialize to a greater or lesser extent, despair is setting in.
False certainty?
The average price of old harvest potatoes is now well above the €50 level and the new harvest chip potato price is also looking at a price of €40 (closing quote on Friday, May 31, futures market April 2025, €38,60). In a tweet dated Wednesday, May 30, the POC questions the security of the potato contracts.
The 2024 harvest year would make the potato grower's commercial thinking turn 180 degrees (has research been done into this?). The tweet advocates a more free potato market as no risk margin is included in the contracts. The tweet does not explain how to reverse the development in the market in recent years - with more and more potatoes being recorded. Growers will certainly be well served this season with the significantly higher contract price, the signatories of the contract apparently agree with that, otherwise not so much would be agreed. The fact is that, given the seed potato supply, the dependence on the potato grower versus his buyer has increased significantly, certainly for the 2024/25 season, and this will not decrease in the coming years.
Straight jacket
It is easy to understand that largely recording the potatoes is almost a must for processors. The point is that the share of freely traded potatoes has become so limited over the years that the market feels more like a straitjacket every season. If the crops in the EU-4 countries grow well, there will soon be a surplus and as a grower you will be happy with what has been contracted (those years will come again). If there are problems, such as last season during the harvest period and currently in the pre-season, the potato contract can be experienced as restrictive. The market price can be significantly higher than the contract price, while there is nothing left to sell.
No matter how you look at it, the yield of an arable crop, including that of potatoes, cannot be predicted, the weather is the merchant. Defining (too) much, often long in advance, is therefore a point of discussion. The fact that the futures market - traditionally a fixed value - can solve some of these problems is underestimated by the sector. There are various pools, but growers or growers with a click contract can also make a significant premium versus the contract for the second year in a row.