Rain or shine, the potatoes have to get out of the ground. Especially now that the physical market is trading at a steady rate and the futures market has experienced a significant increase, growers are doing everything they can to get as much product as possible onto dry land. They are forced to settle for far from ideal weather conditions. A positive potato market serves as a motivator to give it a try.
"In late summer, harvest expectations were high. The whole of Europe was faced with a potato harvest with record averages per hectare. Then it started to rain and the rain lasted for about three months. The harvesting presented more difficulties than the oldest farmer has ever experienced. The weather, Once upset, it remained abnormal. The soil became so soft when the rain was wet. This allowed growers to continue to worry on their soaked land. They often damaged their machines and the structure of the soil."
Heaviest harvest in almost 50 years
The above paragraph is not about harvest year 2023, but about the year 1974. A reporter from De Telegraaf recorded it in early 1975. A disastrous year for the potato sector, especially in the south-west of the Netherlands on clay soils. With a small adjustment to the year it could have been the same this autumn. For some, the 2023 potato harvest will go down as the toughest since this year, almost 50 years ago. The more recent 1998 is also etched in the collective 'potato memory', but had a completely different character. Then on November 23 it was already -8,1 degrees in De Bilt and December also remained very cold. It was over for the potato harvest.
In 1974, 6.000 of the 53.000 hectares of ware potatoes ultimately remained in the ground. The difference was that at the time much fewer potatoes were grown in the sandy areas of Brabant and Limburg, and in the east and northeast the harvest was completed on time. According to NEPG estimates, 15% of the area in the Netherlands is still in the ground. You're talking about 11.322 hectares. Almost double that of '74, but comparable in percentages.
Potato price up to €89
Can we learn something from the market developments of years like '74 and '98? Just like the weather, the potato market also has no memory. 49 years ago, prices at the trade fair in Rotterdam rose sharply when it rained persistently in the south-west of the Netherlands. Schoolchildren and soldiers had to help them dig by hand. Five decades later, much has improved in this area, because the harvesting machines operate even under the toughest conditions. The Bintje price rose to 1974 guilders per 50 kilos in mid-October 100, compared to 11,50 guilders the year before. Converted to today (according to the CBS inflation tool), that is €89,17 per 100 kilos!
Despite all these ingredients, potato prices fell sharply at the end of that year. The law that 'high prices are the best weapon against high prices' also came true then. The highly variable quality also played a role. By the way, the same image was also visible in 1998. On the potato futures market, the price rose to €41,38 at the beginning of December, before slowly falling and even dropping all the way back to a level of €13 at the beginning of May in the spring.
High expectations
Those were different times, back to ours, to speak to a well-known TV program. What does the above teach us? Despite steady sentiment and high expectations, it is not impossible that the potato market will slow down. The potato world today is very different than it was back then. Processors do not benefit from a depressed mood at this stage of the season, which is certainly not good for growers who have yet to harvest. Contracting is coming and fewer potatoes are of no use to the factories need. Due to a shortage of seed potatoes, it will be a challenge to maintain the same surface area in 2024.
The physical market is also stable at the beginning of December with prices at or around €20 for the largest chip varieties in Western Europe. There is still a compelling supply of inferior quality parties. Given the potato futures market, the longer-term perspective (read: April 2024) remains positive. In the last week of November, the price in Leipzig rose to €34,20. However, a downturn on both the physical market and in the long term is not unthinkable around the turn of the year or early next year, when the market is often in calmer waters. It will also become more clear about the size of the area that remains in the ground in Northwest Europe.
Mood positive
For the longer term towards spring 2024, the mood is justified positive. The demand for fries is still very good and processors are managing to achieve very good margins. The fact that not all additional lines may be running at 100% is a shame for the factory, but not a shame. Every potato gets its place. The market itself is also a big difference compared to fifty years ago. While at the time this was almost completely at the mercy of buyers and sellers, today the many price agreements act as a shock absorber. A damper that continues to do its job both up and down as long as the spring is not stretched.