This is what we know about potato contracts 2026

The forum topic on Boerenbusiness "Contract prices 2026" has generated a considerable amount of feedback. This demonstrates the high profile of this topic, and not surprisingly. For four years in a row, arable farmers could count on rising contract prices. They had to, to keep up with the cost price increases. Potato processors have more than compensated for this with their fixed-price contracts. Cost prices rose by 14% to 20% in four years. Fontane and Innovator's contract prices (April delivery) increased by an average of 85% and 76% respectively during the same period.

Unprecedented reduction?
The major potato processors are not yet releasing any price statements. Earlier this fall, insiders indicated that a 10% to 15% price reduction is expected by 2026. This equates to 3 to 4 cents. Such a drop is substantial compared to the past ten years. Prices also fell in 2018 and 2021, but the damage was generally limited to 1 to 1,5 cents on average. Several companies intend to begin contracting earlier. Normally, Belgian companies start just before Christmas, with Dutch companies following at the beginning of the new year. 

Incidentally, such a price drop is considerably lower than that currently seen for the final product, French fries. In June, the average price for Belgian fries was €1.169 per ton, and that for the Netherlands €1.306 per ton. A significant reduction reportedly occurred in October, bringing the price of fries to between €680 and €700.

Clarity through early contracting
The reason for moving the contracting period forward to November is the philosophy that this provides growers with clarity about their buyers' needs for the coming year. This will hopefully prevent a situation like the one in the spring of 2025, when, even after planting had begun, volumes were still being cut. An undesirable situation for everyone in the supply chain, which has had consequences in Belgium, where a judicial investigation is underway into the actions of some buyers this spring. The idea is that if a proposal is made in November, the lease and rental agreements will not yet be signed.

Buyers have announced they are critically reviewing the grower agreements for the 2026 growing season. One of the determining factors for the contract is the grower's location relative to their buyer. In the past two seasons, mileage played a minor role, with potato reliability taking precedence. Buyers now have a considerable selection to choose from, and a selection process is underway. This is already evident in the current season, where it is known that contracts have been bought out to reduce transport costs.

Good relationship between grower and processor
A good relationship between grower and processor was already important, but the quality delivered and other factors now also play a role. What kind of potatoes have been delivered in recent years? Was there additional work due to soil and stones? Does the grower have the ability to store and ship dry? These are all factors that will be considered in the contract for next year.

Friend and foe agree that the current ware potato acreage in the EU-4 does not meet the needs of the industry and, consequently, the sales of the final product. The increase of 60.000 hectares this year was simply undesirable. Whether reducing the number of growers and lowering prices will be enough to reduce the potato acreage remains to be seen. Growers also admit this. They have few alternatives to achieve a net profit.

Cost price may not increase further
A small advantage for the grower is that their cost price might not rise much further in 2026 than it already is. Collective labor agreement wages will rise again, but less rapidly than in 2025. The minimum youth wage, in particular, will increase. Cultivation costs will generally remain the same, although this is also determined by a dry or wet season (read: more crop protection and/or irrigation). 

Processors are currently busy negotiating with seed potato trading houses regarding deliveries for next year. It's known that, after the expected shortage in 2024, not every trading house is working with multi-year agreements anymore. This gives the factories the freedom to negotiate vigorously. For the grower, this can partially offset the contract price reduction by purchasing less expensive seed potatoes.

Over-coverage of factories
Factories are struggling with overcoverage in their contract positions. In the Netherlands, this has hovered around 80% for years, although some debate sometimes arises about what exactly constitutes coverage. Simply put, a potato processor considers the volume of French fries it has sold or anticipates selling, and uses this information to formulate its purchasing policy. Now that French fry sales, particularly in the Netherlands and Belgium, are disappointing, the coverage ratio is unintentionally increasing. This is clearly reflected in the potato market, where there is zero interest in unregulated potatoes.

In Belgium, the situation is slightly different, as Belgian companies work with tonne contracts and not hectare contracts, as is common in the Netherlands. However, the situation there isn't fundamentally different, and growers have also produced more "overtons." The contracted potatoes are fixed at historically high prices. In a sales market that has seen a significant devaluation, this is particularly painful. A possible scenario for 2026 is therefore to reduce the coverage ratio, thereby shifting the price risk more towards the grower. Not every buyer is willing to accept this, they indicate. Contractual coverage has remained more or less the same for years, and little adjustment has been made to date.

Choose a strategy
Potato growers will see significant changes next season. Therefore, the advice is to talk to your field staff in a timely manner. How is your buyer positioned in the competition and what does that mean for your business? Sometimes, it's right to say pointed out on the behavior of potato growers, who undermine their negotiating position in advance by negotiating down the price. True or not: by knowing your cost price and practicing risk management, you can formulate a strategy yourself. This way, you won't encounter any surprises when the contract is in front of you.