There are probably not many growers or other participants in the potato chain in the potato sector who can remember a more extreme start to the season. It was also far from sunny last week and there was more than enough rain locally. According to the weather reports, this will not change in the coming week. A lot of rain may fall again locally, causing damage to all crops to continue to increase.
Potatoes were planted again last week, especially in the south of the Netherlands and further in Belgium. Yet with July already on the horizon, there are still plots of land untouched. In a number of cases, the growing season has already partially or sometimes largely failed and a normal yield is no longer in sight. It seems that the potato market in the EU-4 countries has ended up in a kind of perfect storm: everything that can go wrong seems to go wrong.
The precipitation already started in October last year, at a time when Belgapom was recording €10 per 100 kilos (unbelievable now). From that moment on it seems almost constantly too wet without it being a real winter period. The heavy rain caused major problems with the harvest last growing season. The harvesting was extremely difficult and many potatoes were lost. This is now reflected in the development of the 'old' harvest market. For example, more than €60 is paid for French fries-suitable Fontane, a record that has been achieved for the second year in a row. And the season isn't over yet. For example, higher prices are already being achieved for a popular variety such as Agria.
From shortage to shortage
Coming from a shortage situation, we are moving towards a new shortage situation for the 2024 harvest. The challenge is particularly great for all stakeholders, and no one yet knows how to approach this exceptional market situation that has arisen. An inventory 'along the fields' shows that the sector must take into account that at least 15% less will now be cleared than what would have been possible in a normal situation. According to this expectation, the total EU-4 harvest is lower than 20 million tons, which (logically) leads to a persistently tight market. It will mainly be the free portion of potatoes that will be in short supply, which makes it even more explosive. After all, the largest volume is contracted.
Just a few more points:
All these problems/challenges mean that the futures market for the April 2025 contract is now trading at €40, a record for this time of year. With regard to the futures market, the supply is limited, despite the high price level. Growers are reluctant to sell or click, as they do not know what will come above the ground and to what extent sales have already been made on paper. A second season in a row with unpredictable extremes will also provide even more challenges in the coming years. Seed potatoes will be an issue, among other things, but also to keep the consumer grower motivated to fill significantly expanded chip processing lines.