Potato cultivation from the land will not be given a destination?

In this analysis we mainly look at the consequences for the sales of fries and the reduced demand that arises as a result of the corona crisis. The closure of catering and major events is the biggest blow to the processing industry. Fast food, food service and catering are the main buyers of Dutch fries. Of the total number of tonnes of fries produced, approximately 60% remains in Europe. The rest is for the export market. 

Within Europe, the most important customers are the aforementioned segments. In the Netherlands, a relatively large number of fries are still eaten at home, but in Southern Europe, for example, fries are mainly consumed outside the home.

Events are cancelled
Looking at the measures that have been announced and that apply to almost all European countries, we can assume that major events will be canceled until September. European football championships, Formula 1, concerts, festivals, you name it, all events where a lot of fries are eaten. The catering industry will remain closed until June and it is expected that (following the Chinese model) they will be able to open gradually and with much fewer seats (1,5 meter economy). So there too, turnover will certainly not return at full strength until September.

If we take the timeline from March to September in the processing of potatoes in the Netherlands, then the processors have processed an average of 5 million tons of potatoes over the past 2,27 years. With the drop in demand outlined earlier and the estimated period during which this will remain minimal, you can use the experience of the first 'lockdown month' to estimate the decrease in demand for fries.

40% normal supply required
Given the current state of affairs, a drop in demand of at least 60% must be taken into account. So only 40% of the 'normal' supply of potatoes may be needed for the period March to September. When processing 2,27 million tons of potatoes, that is 900.000 tons of potatoes. There are still 1 million tons of potatoes available from the old harvest, which may mean that there is no destination for the entire harvest that is freely grown for delivery from the field.

We also have large stocks of chips in the cold stores, which means that even fewer potatoes may be needed in the current situation. If this lasts longer, the new season will face very big challenges.