That the potato market is currently struggling is clear to anyone active in this market. The complete collapse of demand for (free-range) potatoes is shocking many growers and traders. Buyers are also at a loss as to how to fulfill their commitments to growers.
When the surplus in the potato market arose (see article: 100.000 tons of surplus) it was clear that drastic measures had to be taken by the various market players to eliminate the potato surplus. With current knowledge, all major processors have too many (expensive) potato obligations on their books. Due to the decline in French fry sales, urgent solutions are being sought.
Rare antics to get rid of old harvest
Cold stores are being filled, alternative sales channels for starch have been utilized where possible, and finally, the final stage, the forage, has disposed of the bulk of the surplus from the old harvest, which was then sent to the cow's mouth and fermentation. But with the clearing of the old harvest, the problem with the new harvest also arose. The generally good growing conditions, the area expansion, the later start of the early potato harvest and the still stagnant sales of French fries from the EU, also ensure a surplus in this phase of the market.
Bulldozing
Processors are struggling to meet their obligations. The (excessive) number of contracts they signed during the harvest season, combined with faltering French fry sales, are creating a potential potato surplus. The market, as it currently stands, will drag on in the coming months by postponing obligations as much as possible—the so-called bulldozer effect.
Resourcefulness
Every processor and trader is trying to find solutions in their own way. For example, some processors are organizing temporary storage. Others are simply collecting their contractual obligations and leaving the tons that fall outside the contract with the grower, stating that they will find a suitable destination for them.
The most drastic "solutions" are reported by growers from France, Belgium, Germany, and even Denmark, where processors and traders propose ways to avoid fulfilling their obligations. This involves transferring part of the contract price in the hope of relieving them of the obligation to actually collect the potatoes. These buyout proposals primarily focus on the variety and the delivery distance. Especially with potatoes, where high transport costs are involved, this is a burden for buyers. They are unwilling to incur these additional costs.
Some growers actually take advantage of this and then bravely continue to enter the market themselves to find a market for these potatoes, whether through intermediate storage, starch, fermentation or other alternatives.