The potato market hangs between feeling and facts

It is clear that the potato market is once again in a special situation. The golden mean has completely disappeared in the potato market. Eight weeks ago the market was still at €60 and today there is no buyer to be found.

The Dutch and Belgian processors are behind in their schedules and there is also a lot of shifting of potatoes. Growers would like to deliver, but it is often not their turn. The late start of the season causes a delay of one to two weeks for the processors. The result is that there is a kind of traffic jam of growers with contracts who would like to have their land empty. The potatoes also continue to grow, which creates more supply and further increases the delay. See the downward spiral here.

Offer of unknown varieties
There is simply no room for free potatoes and this has nothing to do with the price. There is also a supply floating above the market of unknown varieties that have been planted by opportunists due to the alleged lack of seed potatoes. Last year we saw a similar decline, but it happened later. The expectation in the market is that if the price becomes low enough, supply will dry up. The costs of harvesting then become too high to still offer potatoes. Alternative markets then come into the picture or growers start looking for (temporary) storage.

It is extra difficult for (free) growers, because this year will be known as the most expensive cultivation year ever. Expensive seed potatoes, high land prices and extreme pressure from diseases are driving record use of crop protection products. Extreme rain forced many growers to apply extra fertilization and now that it is dry, the rain reels are running again. The low price has only a limited impact on the price of potatoes from storage. The futures market held up well this week and even rose slightly towards €29 at the end of the week.

Growers are keeping their spirits up
There is therefore no supply of potatoes from storage. Growers are keeping their spirits up and see many plots in their area that have something wrong with them. Water damage, emergence problems, phytophthora and very late planting are reasons to assume that the yield will not exceed the five-year average. Much will depend on the weather conditions until the end of September. If the late-planted plots can still produce some extra kilos and the yields of the plots that have water damage are still better, then these are the open items that determine the further price development.

Another point of attention is the significant growth of the potato area (despite the shortage of seed potatoes!) in France and Germany. With an average yield, the processing industry appears to have sufficient raw materials available despite the growth in processing capacity. Germany in particular seems to be heading for a reasonable to good harvest and can therefore be used by Dutch and Belgian processors as a 'buffer' for possible shortages in the Benelux.

Cooling down the chip market slightly (not the price, but the volume) also plays a role. America and Canada had a good harvest last year and seem to have one again this year. This means stiff competition for European fries sales.

All in all, it remains opaque for arable farmers in the EU-4 in terms of both price formation and market developments. Especially because many growers receive different signals from the field (and their current account). Low grain yields, low beet yields and a mediocre crop status fuel expectations in the market.