Potato processor Lamb Weston is increasing its contract prices for deliveries from storage for the 2025 harvest year, according to new contracts. In the field segment, prices for French fry potatoes are decreasing slightly.
Where most potato processors choose to keep the prices from storage the same, Lamb Weston comes up with a small increase for the coming season. This is evident from the new potato contracts with which the company is currently going to the farmer. The processor does make a distinction between Fontane and Innovator. Afland is lowering the contract prices for both varieties slightly. This is also a movement that we see at more companies.
From research of Boerenbusiness it appears that at Lamb Weston the price of Fontane in the off-land period for the main harvest is €162,50 per tonne. In week 17 (end of April) it is €266,50 and in week 26 (end of June) finally €290,50. Off-land the Fontane price drops by €10 and in week 17 by €2. At the end of June the price increases by €7 per tonne compared to last year. For Innovator the price level this year is €187,50 off-land. In week 17 the price is €291,50 and in week 26 it is €315,50. Compared to 2024 the off-land price decreases here by €2,50. In April the price level is €5,50 higher and at the end of June it is even €14,50 more. These are the highest prices the company has ever offered for potatoes.
Seed potatoes
Henry Beugels gives the reason for these changes as the company wants to reward growers better for longer storage. As Senior Manager Agriculture & Operation, he is responsible for, among other things, potato purchasing in the Hafpal area (an acronym for the region between Hamburg, Frankfurt, Paris and Le Havre) at the American processor. Seed potato prices are also rising slightly this year. This is due to the expiration of multi-year agreements. However, the company does have sufficient volume.
Partnership
Beugels emphasizes the importance of close cooperation between processor and grower. "We see this as a partnership, in which we want to move forward together. If performance is disappointing, we try to see where there is room for improvement. A partnership also means: prompt payment (14 days after taring), transparency in all processes and no potato tare. Speaking of taring; growers are always welcome in the factory to be present."
The purchasing director is positive about the new season and notices that growers are too. "Potato cultivation is risky, but on the other hand, the financial income has also been good in recent years. Especially when you compare the prospects for cultivation year 2025 with alternative crops, potato cultivation remains lucrative." He notices that in general the availability of (rented) land for potato cultivation is increasing slightly in the Netherlands. "Some dairy farmers have decided to stop their business. Land that is suitable for potato cultivation is also being used for that. That has already happened in part, but we are also seeing interest from new entrepreneurs. They are mainly interested in delivering ex-field."
Volume increase multi-year process
With the opening of a brand new factory in Kruiningen (Zld.) – last November – the production capacity has increased by 195.000 tons of end product per year. Lamb Weston can use more potatoes for that, but, "it is not the case that we suddenly need a lot more volume", Beugels explains. "This is a multi-year process that has been going on for much longer."
The construction of a new factory is exemplary for the European and global potato processing, which has grown strongly and also has many growth plans. As a result, supply and demand – both for the raw material potatoes and the end product fries – have to find a new balance. For the first time this decade, the processing capacity is greater than the demand for the end product. For the long term, producers of fries are still positive, although a small dip in European sales of fries can be seen in recent months. This does not lead to any concerns.
Collaboration
Despite the challenges for potato cultivation in the Hafpal area, the sector in Northwestern Europe still has a good chance. Cultivation and processing are clustered there and logistics are excellent. It is up to the entire sector to tackle sustainability issues, which end-product customers and consumers are increasingly asking for.