Once again, German starch potato processor Emsland Stärke is increasing its base price for potatoes in harvest year 2025. The company wants to maintain its acreage and preferably see it expand. This can only be achieved with a competitive price level.
The base price for harvest year 2025 is €115 per ton of starch potatoes (at 19% starch). This is an increase of €5 per ton compared to the previous harvest year. At 21% starch, the base price is €125 per ton. This news was announced at the first annual meeting, which Emsland Group held on January 30.
Back Payments
During the meeting it was also announced that the company is partially advancing its planned back payment. The company will pay out €20 per tonne for every tonne of contracted starch and flake potatoes grown in 2024. Half of this amount has already been deposited into the growers' accounts. Members of the Erzeugergemeinschaft (growers' organisation) will receive an additional €7 per tonne gross dividend. This Erzeugergemeinschaft (EZG) owns by far the largest share of Emsland Group shares (around 240.000 shares). The majority of the remaining 82.000 shares are held directly by growers. In total, almost €15 million in dividends will be paid out this year.
Emsland Group is on a roll thanks to a positive market for potato starch, flakes and derivatives. In the 2023/24 financial year, the group achieved a turnover of over €961 million. That is a good €31 million more (5,5%) than in the previous financial year. The EBIT (operating profit) amounted to €118,8 million, compared to €113,1 million in the previous year.
In addition to the dividend, which the EZG uses to increase the potato price for its members, growers receive a gross dividend of €60 per individual share they own. This represents a return on the share of 15% for the 2023/24 financial year.
Factory expansion
Emsland is expanding and modernizing its factory in Emlichheim, a stone's throw from the Dutch border. This requires more potatoes. The company hopes that good financial results will convince growers to grow at least the same amount, but preferably more. Last year, this was achieved - in a strongly shrinking market.
Allowance
Since last year, Emsland Stärke has been offering a contribution towards the fertilizer and crop protection costs of €1.200 per share (good for 30 tons of potatoes) that will be concluded in 2025. Of this amount, only €900 has to be repaid over three years. In addition to a one-off processing cost contribution of €50 per share, €300 is paid by Emsland. The €400 per share, which is paid to the EZG, can be spread over a period of these 3 years. These shares retain their fixed value of €400 and will be repaid by the EZG in the event of termination of cultivation. In exchange for this contribution, the company asks for a minimum of three years of potato cultivation
Pea cultivation
In addition to starch from potatoes, Emsland also produces starch from peas. A small area is cultivated in the Netherlands, but this is growing. The leguminous plant fits within the sustainability requirements of the CAP. In addition, the crop requires hardly any artificial fertilizer, which is why it thinks that the cultivation fits well with companies that grow in an NV area. For the coming harvest year, Emsland aims to expand the crop.