The area of table potatoes in the EU-4 is reaching another record this year. This doesn't guarantee a bumper harvest. However, there's a good chance that sales of French fry potatoes will remain uneven, especially given the faltering sales of potato products from Europe. The major potato-producing countries are once again showing significant growth in production.
At the beginning of July, the EU-4 countries (the Netherlands, Belgium, Germany, and France) all published their official area figures. Germany is the only one that does not report a separate figure for ware potatoes. Therefore, we used the growth percentage for the total area to determine this.
Growth in line with forecast
In our initial analysis (mid-April), we assumed a 5% increase in area for the EU-4, representing over 575.000 hectares. The final percentage is 4,5%, and the provisional area is 575.210 hectares in the four countries. All countries are experiencing growth in ware potato cultivation. France's growth is the most moderate. The other three countries more than compensate for this, with Germany, in particular, experiencing significant growth in absolute hectares.
The total growth represents an additional 24.680 hectares of ware potatoes. This is less than the nearly 35.000 hectares added last year, but it is still substantial growth, especially considering that processing has now reached saturation point. The growth in the Netherlands and Belgium, for example, has taken many by surprise. The availability of land and seed potatoes, and the lack of alternatives, has driven even more growers towards French fry potatoes. Many processors ultimately reduced their contract volumes for this harvest year. We can therefore conclude that of the nearly 25.000 hectares, a significant portion is cultivated freely, or at least without fixed price agreements.
Yield decline
These figures allow us to make an initial estimate of the size of this season's potato harvest. We calculated this using the average hectare yields per country over the past five years. It's striking that the lines per country no longer simply show an increase. With a five-year average yield, the volume amounts to 24,05 million tons in the EU-4 countries. That's 42.000 tons less than last year's harvest, a decrease of 1,7%.
This makes it the second-largest harvest ever in the EU-4, primarily due to the area expansion. We now know, especially with disappointing sales, that a volume of 24 million tons is simply too much for processors. In 2017, 23,5 million tons were harvested. The market then also showed a similar picture.
Hectare yields
Much depends on the yields per hectare that will be achieved. The five-year average is 42 tons. Last year, it was 42,6 tons, and in 2017, it was a whopping 50,25 tons. The other way around is also possible: in 2018, an average yield of 37,12 tons was achieved. This means the theoretical harvest could fluctuate between 21,3 and 28,8 million tons. Neither is very realistic in the current context, but the question is what the market is balanced at.
The potatoes were planted early this spring under favorable conditions. It then remained dry, and in many places it's still dry, or has already resumed. Rainfall was sometimes very localized, with significant regional variations. A consequence of the planting date and the drought is that there are fewer tubers on average per plant. This affects not only the size but also the final yield. Combined with a long warm spell, the harvest could be historically early this year. Early varieties are already on the decline by early July. Growers believe this is causing yield losses.
Potatoes planted later still look much fresher, but their foliage development isn't always optimal. How these crops perform depends heavily on the weather in the second half of July and August. Weather models still point to relatively dry and warm weather, without any significant outliers. An average to slightly below-average yield is currently the expectation among insiders. Test harvest figures will soon provide clarity on this.
Implications for the market
Much can still happen in the 16 weeks that remain until the end of the harvest. Significant acreage expansion ensures that potato availability is not a concern, especially when demand is significantly lower and processors have fewer needs. They signed a large number of contracts at the beginning of this year, perhaps even more than they should have. High prices were paid for these contracts.
This is good news for growers who have managed to secure the desired volume. Less so for processors, who are thus also keeping their costs high. Growers with free-range potatoes are hoping for a revival in demand and a need for specific varieties or specific delivery dates, and are seeking sales opportunities.