Potato growers are facing a very uncertain season. That is precisely why you sign a fixed-price contract, but even that offers no relief now. Processors have made significant cuts, and not only in prices. In this analysis, we outline the most important changes and differences between buyers.
Update 18-3: The article has been adjusted with the correct information regarding Nedato's contract.
A year ago, the potato contract had to mask the fact that there were (major) concerns within the sector. Even then, it was known that the price of fries had risen to sky-high levels and that there was competition and a drop in demand. That wrote well over a year ago. The mutual competition within the EU-4 apparently caused even more fear, leaving prices virtually unchanged.
Overcapacity
This spring, buyers of processing potatoes are adopting a very different stance. It is clear to everyone that there is an unprecedented slump in the processing (potato) sector. Processing capacity, which has been expanded exponentially in recent years, is currently not needed. This makes things extremely difficult for the grower. Factories have choices to make, and this is reflected in the fixed-price contract. The countries and market segments in which your buyer operates also determine the contract and, ultimately, your course as a potato grower. Differences are also noticeable between North American and European players.
First, the bare, hard figures. All prices for Fontane and Innovator are falling this year. They are roughly returning to the 2022 level. This is difficult for the grower, as the cost price is not falling at the same pace. The biggest decline is noticeable at the farm level. The average price of the five Dutch processors, plus Agristo and Clarebout, stands at €12,79 per 100 kilos. That is a decrease of €4,38, or 25,5%. In week 17, the average price is €22,17. That represents a decrease of €4,90, amounting to 18%. By the end of June, the decrease amounts to €4,74, bringing the average price level to €24,64. That is 16% less than a year ago.
At Innovator, the reductions are smaller this season. Ex-farm, the average price comes in at €15,96. That is €3,54 less, or 18%. In week 17, the price level stands at €25,63. A reduction of €4,10, or 14%. Finally, week 26 comes in at €27,81. That is €3,79 lower. Good for 12%. A small consolation is that seed potato prices are also falling everywhere. That compensates up to a maximum of one cent on the contract price.
Smooth scribble
Across the board, prices are therefore approximately €4 lower compared to the 2025 harvest year. This is what growers had expected beforehand and what was being discussed informally. This is likely also the reason why potato growers often signed contracts quickly. At least, if you believe the buyers. They had braced themselves for a difficult period, which ultimately turned out better than expected. What is also striking is that not everyone has reached an agreement with their buyer yet, as proposals were sometimes not made until mid-March.
Fewer tonnes at a fixed price
An important adjustment in the contracts concerns the volume that growers are allowed to supply. As Belgian companies, Agristo and Simplot-Clarebout work with tonnes contracts. The former opted for a generic reduction of 20%. At Simplot-Clarebout, this is 25%. The situation is slightly different for the Dutch hectare contracts. In most cases, Farm Frites is implementing a reduction of just under 10 tonnes per hectare, from 40 to over 30. Lamb Weston is also opting for this. At McCain, according to grower information, the reduction is slightly smaller, from 40 to 35 tonnes. Aviko states that it is opting for a tailored approach.
In most cases, potato trading companies have to scale back their agreements even further. For instance, at Weuthen, the contract price applies to 80% of the total volume, while at Q-Potato it is 65%. Nedato growers are allowed to fix 75% of the average volume over the past three years at a fixed price.
Checkout
It is not certain that fewer potatoes will actually be grown. However, the risk lies 100% with the grower. Some processors retain the right to purchase these potatoes and therefore continue to supply seed potatoes. An alternative is to place the potatoes in a pool, if the processor facilitates this. Another interesting topic in this regard is the method of settlement. Not everyone chooses PotatoNL or Belgapom. An average of the EU-4 quotations, for example, is an alternative.
End of click contract
Click contracts were very popular among growers for years, allowing them to move with the market despite having a fixed sales contract. Now that the curtain is finally falling for the potato futures market Growers are missing an important tool to manage price risks. However, it remains to be seen how processors with click contracts will handle the news and whether, for example, they will declare these contracts void. Farm Frites decided to stop using them on its own initiative at the start of this season.
Aviko is the only one introducing a new contract this year, the pool participation contract, which sets a price floor and looks to the free market. Simplot-Clarebout is introducing a quality system as Dutch growers are accustomed to.
Last year, we expected that the acreage would not grow explosively again. Ultimately, the consumption potato acreage in the EU-4 increased by no less than 35.780 hectares. A growth of 6,5%. It is highly likely that a similar figure will be recorded as a reduction for this year. That is also the minimum required to bring the sector in the EU-4 back into balance with demand. In fact, an even larger reduction is needed for that, of at least 10%.
Own account
Processors have parted ways with some growers, or significantly reduced their acreage, when they no longer fit the picture. The question is whether these companies will grow potatoes for their own account or for another buyer. Seed potatoes are available, but the risks are enormous. The coming weeks will show which direction things will take. The fact remains that growers face a very uncertain future in the new growing season.