In a market with more than 1 million tons of potatoes that will never reach their intended final destination, you expect alternative solutions to be eagerly fulfilled.
In recent weeks, various processors have cleared potatoes intended for processing for animal feed, flakes, pet food and bio-fermentation. These potatoes, often contract potatoes in storage with growers, yielded between €1 and €1,50. This offer was fertile for many forage traders, as a number of other raw materials for sale to livestock farming were not or less available.
For example, spent grain is scarce due to low beer production and chip chips are also less available due to the halt in French fries processing. Many livestock farmers are therefore interested in feed potatoes. Cows can eat between 10 to 20 kilos of potatoes per day, so once livestock farmers start feeding things can go fast.
Supply comes to a standstill
However, now that the first and most compelling batches have been loaded, the supply of potatoes has come to a standstill. Processors are no longer offering and growers who have available potatoes themselves are also waiting a while before selling their potatoes. Free growers note that they can always 'sell' for €1 and processors are also reluctant.
The main cause, however, is the government's preparation of a scheme to (partially) compensate growers and processors due to force majeure due to corona. Growers are afraid that if the potato warehouses are empty, they will no longer be eligible for compensation. The supply of potatoes dried up within a week. This now creates a special situation where there is a lot of demand for potatoes, but there is no supply. This also explains the stable pricing on Potato.nl and, strangely enough, the mood actually matched that.
Hurry is required
It is not known how long the government will have to wait. It is important that it should not take too long in any case. The current market development is artificial and everyone knows that sooner or later those potatoes will have to be cleared. Hurry is required.
The government is probably struggling with a number of issues. In this way, the government cannot only offer a financial solution for potatoes, because other sectors are also suffering significant damage from the corona crisis. Dairy farmers, ornamental growers and other agricultural sectors are also asking for compensation. Moreover, it is quite a job to make a scheme that is feasible, does not lead to fraud and also does justice to the damage actually suffered by the companies. This takes more time and will therefore not be presented in the short term (in days).
Getting started in steps
In the meantime, the potato market is stuck and no pace can be accelerated. It is important that the pace is set and that the old harvest is cleared away in time, so that it does not get in the way of the new harvest. This fear is even greater. The area during the off-farm period will not shrink sufficiently and the demand for fries will not immediately return to 100% if the measures against corona are relaxed.
China is an example of this. The economy is starting up very gradually. Major events and the 100% reopening of the catering industry will happen in steps. It is therefore expected that the industry will still be far from 2020% processing before the end of 100, as it was in the pre-corona era. Chip stocks, insufficient shrinkage of the farmland area and failure to clear the old harvest in time can therefore have a major impact on the coming season. So speeding up the clearing of the old harvest is the motto.