None of the processors wants to be the first with a contract price for the potatoes of the 2025 harvest. The industry does not want to buy the potatoes unnecessarily expensive, but the individual processors also do not want to come out with too low a price, which would cause growers to do business with competitors. In addition, contracts seem to be almost the magic word for the potato processing industry to control the area.
The potato processors in the EU-4 have invested heavily in production capacity in recent years and due to a good demand for fries there was also a good demand for potatoes. The mood is therefore very different from the contract round for the 2021 cultivation year when processors - after the difficult corona period in several respects - came up with lower contract prices. That reduction that year had a demotivating effect on growers and that was reflected in the area.
Rising contract prices
Over the past three years, the processing industry has been keen to ensure sufficient potatoes, and this is clearly reflected in the contract prices. Compared to 2021, the contract price for 2024 has increased by 75%. In part, this higher price is desperately needed to cover the sharply increased cultivation costs, but processors also have an interest in keeping growers motivated to grow as many potatoes as possible.
The French fries market has cooled down somewhat, but various processors indicate that demand is still good. A reduction in the supply of potatoes does not seem desirable from the processors' point of view. Keeping the Dutch potato harvest stable could well be a challenge. According to preliminary figures from Statistics Netherlands, approximately 2024 hectares of potatoes were grown in 78.000. This is the second largest area since 2001. Only in 2019 were more potatoes grown, namely more than 79.000 hectares. We can therefore say that we are reaching the limits in the Netherlands in terms of area.
Ensuring sufficient area is one thing, but then the growing season determines how many potatoes will be harvested. In the last five years, the yield has remained fairly stable. What is particularly striking is that average hectare yields of 50 tonnes or more have been around for a while. The last time was in 2017.
The fact that yields have been lagging behind in recent years could be due to the fact that potatoes are also being planted on less suitable plots when the area is larger. This reasoning is incorrect when you look at the figures. In 2011, 2014 and 2017, the area was relatively large and yields were still well above 50 tonnes. The weather that is not entirely cooperative seems to have a greater influence on the final yield.
Nitrogen space
Another factor that will most likely have a negative impact on the Dutch potato sector are the new manure standards for the coming season. In the nutrient-polluted (NV) areas, the nitrogen application standard will be reduced by 2025% from 20. With some shifting in the nitrogen application between crops, as happened last season with the 5% reduction, you will not get there next season. Such cutting in the nitrogen space, as will happen next season, costs yield in the potatoes. A lower yield also has major consequences for the grower's cost price.
If the goal is to maintain the potato harvest in the Netherlands, then the area should grow. However, that space is limited. From that perspective, it is very interesting to see which strategy the processors come up with. After all, they have an interest in maintaining the occupancy rate in the factories and that is what potatoes are needed for.