The management of starch group Avebe often faces criticism during district meetings. Not this year. There's actually applause. The share in the starch cooperative is worth money again.
There was a good atmosphere at Avebe's district meetings earlier this week, as evidenced by the reactions of arable farmers who attended. One of the critical potato growers took a stand, as quoted from the meeting of the Southern district group. He hadn't imagined he'd be happy with Avebe in the past fifteen years. He complimented the management and the group on the value the company now delivers to the growers.
For years, starch growers had to pay to reduce their stake in the group. Hundreds of euros per share were paid to reduce the number of potatoes they could supply to the group. Shares were also surrendered directly to the cooperative, costing those growers €680 each.
Now, growers are again approaching the cooperative to get their surrendered shares back or to buy them back. CEO David Fousert emphasizes that surrendered shares will not be resold. Growers who want shares must buy them on the market. This indicates that a change of pace is now blowing in the Veenkoloniën region.
Not long ago, a buyer of twenty shares received €10.000. Growers who wanted to sell the shares were willing to pay that amount. Not that the shares are suddenly expensive, but still. The fact that they're being paid for again is a healthy sign.
Yet, it's not all rosy in the starch world. This sector, too, is being hampered by the strong euro and import duties in the United States. However, the increase in potato prices in recent years has led growers to be particularly positive about their performance in Veendam this year.
In a year when the free potato trade has completely collapsed, Avebe offers a welcome refuge. French fry potato contracts are still being bought out, and those potatoes end up in feed, in the digester, and also in the potato receiving area of the starch factory. And there are also large growers and traders who have bought up free potatoes that ultimately end up at Avebe.
French fries potato contracts bought out
In October, it was common to hear about potato contracts being bought out. This month, it seems to be less frequent, but it's still happening. Processors are implementing extra and longer breaks to curb production. Sales are struggling, so they're putting the brakes on production. Cold stores are full, so there's no more room there. As a result, they don't want to buy all the contract potatoes. They're therefore looking to buy out the contracts.
If the manufacturer doesn't have to collect the potatoes, they pay the contract price minus 1 or 2 cents per kilo. The grower is then free to find another outlet for these potatoes and thus offset the price difference. These potatoes go to feed for free or at a small price, but some potatoes also go to Avebe via this route.