The Belgian-Dutch potato processor Agristo presents their contract price for the 2022 harvest year at its regular time, before Christmas. The company is implementing price increases across the board. It remains the strategy of stability and transparency for all growers.
Agristo's contracts are simple and clear. This concerns a contract to the tune of 35 millimeters upwards. The company is happy to buy potatoes outside the contract from the grower at the daily price, but this is not an obligation. It is up to the grower to cover himself and choose the risk profile that suits him and his company. "We are in favor of a healthy free market to support cultivation," summarizes Steven de Cuyper, agricultural director of Agristo. According to him, stability, a good relationship and transparency are important for the company.
€2 to €2,50 increase
"We increase prices by an average of 20% before the new year and by 15% after the new year," says De Cuyper. What does that actually mean? In week 35, Fontane starts at €12,25 per 100 kilos and Innovator at €14,00. In week 17 (end of April) this is €18,25 for Fontane and €20,25 for Innovator. In week 27 (first week of July) only Fontane (and Markies) is used at a price of €20,75 for the former.
The prices mean a price increase of €2,25 and €2,00 for Fontane in the three delivery periods mentioned. For Innovator the difference with last season is €2,50 and €2,00. A similar increase is visible in the Challenger and Markies varieties. This last variety is processed from week 18 until the end of the season. Its price goes up to €21,00.
For the current harvest year Agristo reduced their contract prices by €0,25 to €1,00 per 100 kilos. The price for long-term storage remained unchanged. Seed potato prices will increase by 2022% in 5. Last season €1 was deducted and now an average of €2 is added for 35/50mm across the board.
Confidence in the market
There is uncertainty for the company, especially on the sales side. Yet De Cuyper remains down-to-earth. "In March 2020 we saw the market collapse when the coronavirus arrived. We have now learned a lot. We will not experience such an overreaction from the sales market again. However, you notice that caution among buyers has increased."
There is also uncertainty on the cultivation side, but here too things are put into perspective: "In the past we have often seen high grain prices and rising input costs. The contract prices at the time were at a completely different level than today. We see very broadly - for all raw materials - that there are price increases. The contract prices were already at a high level, which we are now taking a justified step towards."
Stability is the approach
In terms of strategy, Agristo will not change next season. A third production line will open in Wielsbeke in spring 2022. De Cuyper: "We hope for a stable area at the 2020 level, which we are initially looking for from our current growers. It is up to the grower to assess what his optimum is in terms of area and price coverage. This is important for the entire chain stability in price formation. It is also very important for Agristo that one contract (price) is used for all our growers. Whether they are in the Netherlands, Belgium or France. We attach great importance to a stable relationship."
Of course, Agristo also has to deal with the changing political climate in Europe. Through the Green Deal or the nitrogen policy. "The direction of the policy is clear, but the major changes still have to be translated into practically achievable objectives," says De Cuyper. "The steps we can take every year must also contribute to progressive insight. It is clear that we have to take a new path with the entire sector. You see this reflected everywhere in politics. New varieties must provide help to use less fertilizer and use crop protection products. That is a process that will take at least ten years. From the current situation, major steps still need to be taken to be in line with the political expectations for 2030."
Family business Agristo was founded in 1986 and produces approximately 800.000 tons of fries and other potato products annually. In 2020, turnover was around €600 million. Production takes place in Harelbeke, Wielsbeke, Nazareth and Tilburg with more than 1.000 employees. About 700 growers are affiliated with the company.