Both the cultivation and sales of the 2023 growing season were special and challenging for seed potato trading house Agrico. The cooperative was able to meet the agreed volume contracts (by converting to larger sizes), but could not fully meet the additional demand from the industry. This meant that it was hardly possible to benefit from the free market price. However, this is about to change, assures Agrico director Mark Zuidhof.
How do you think the marketing season went, considering the lower seed potato yields, payment availability overseas and sometimes also political tensions?
"Demand from the export market was fairly calm, with the exception of Egypt. This country demanded large volumes that were ultimately mainly met by Scottish seed potatoes. Due to the scarcity of seed potato availability, prices rose sharply. This made seed potatoes too expensive for certain destinations. , which resulted in fewer or no imports. Demand within Europe was very good. The consumption market was at a good level all year, which meant that there was healthy demand for the new season, especially in the West -The European industry requested a lot of seed potatoes. Unfortunately, we were not able to supply all of this, which means that varieties have been planted that are less optimal for processing into chip potatoes."
Due to the lower seed potato yield, the volume contracts could not be met. How was that problem solved?
"Agrico was indeed unable to supply sufficient volume in the sizes and classes sold. However, the industries have been very flexible in purchasing coarser seed potatoes and other classes. In this way, Agrico was able to meet its obligations to increase the area sold had to be planted to deliver. However, there was much more demand in the market for industrial varieties. Agrico was not able to benefit from this last year because a significant volume was already fixed.
Is that also the reason why seed potatoes could not be sold for higher prices in the open market?
"Partly it was indeed the volume that was already fixed. On the other hand, the excess volume was so high this year that that did not help either."
How was the sale of oversized seed potatoes intended for consumption handled, and did we benefit from the increasing consumption potato market?
"Last year, Agrico implemented the policy that all industrial varieties up to 70 millimeters were supplied to the industry as seed potatoes. At the time of sale, a price was achieved for this that was above consumer prices, with sufficient margin for the work that needs to be done. to prepare a batch of seed potatoes. This was different for export varieties. These are mainly sold for export consumption destinations. The challenge we have in seed potato cultivation is that we cannot treat the batches with MH or other means to inhibit germination. , or prevent it. So a large part of this sales also took place before Christmas at prices between €20 and €30 per 100 kilos."
What does the pre-sale look like for the industrial varieties and will you make any changes to this in the coming years? Previously, for example, Fontane was completely captured in the foregoing...
"Until a few years ago, Agrico's policy was to indeed enter into multi-year contracts, for both volume and price. We have seen that in the last few years the market has been so volatile that it is no longer responsible for our members to pay for a We have also moved away from this and only conclude annual contracts in terms of price. Both Agrico and the customers want to know what they can count on in the coming years the area. Long-term agreements are therefore still being made with buyers about this."
Mark Zuidhoff
"Regarding the volume that Agrico commits for the season: we consulted our members about this during our meetings in January 2024. This clearly showed that our members want to commit less for the season and that the prices for which we commit are higher We have incorporated this into our sales strategy for the 2024 harvest. So far, this has resulted in significantly higher sales prices with a lower percentage coverage of the Dutch seed potato area of the part that has been fixed at a fixed price."
How did the cooperative's growers actually experience the level of the payment prices?
"A changing picture is very clearly visible, which is mainly caused by yield differences per region, virus situation and also the quality. The drought during the growing season led to a low count, which led to a coarse product. This obviously has the yield and also the financial return. The drought has also caused more scab, which has led to problems, especially in the export parties. We generally see that members appreciate that we communicate openly with them about the sales policy and the expected results prices achieved in the various pools.
What is the interest in industrial varieties for the 2024 harvest? You already had discussions about this at the beginning of this year...
"Yes, they have indeed been fed. The demand for seed potatoes in this segment is enormous and we are doing everything we can to meet this. Agrico has been able to significantly expand its acreage in the Netherlands, but also in the surrounding countries. This is to support growth of the industry and also to keep up with the increasing demand. Industry sales have been at higher levels than the previous year. Our members were fully included in the payout meetings that took place in July."
This year there has been a huge expansion in seed potato area for the industrial varieties. Isn't that a bit too much of a good thing?
"We must not forget that the industrial varieties do not only remain in Western Europe. There are also many export destinations with industrial processing, where there is also a demand for these varieties. These destinations also did not have the volumes they wanted last year, so I I believe that the expansion of the industry varieties is in line with the increasing demand of this segment."