• Potato Crop Update July 2013

Potato Crop Update March 2018

Posted on 22/03/2018

Over the past few months the processing industry has expanded its capacity substantially with a record production of over 29 mio tons. However, through processing potatoes in the EU-5 this lead to an imbalance between supply and demand.

The surplus volumes in contracted farmers' storages meant the processing industry hardly needed to buy additional volumes, resulting in a low daily price quotation and leading to April's future quotations being the lowest since the start of this potato season.

Huge volumes of oversupply free buy potatoes have been sold as low prices over the past few months to 'lower value segments'. The starch industry in north and south Germany, north of France and Holland has worked overtime and are still producing in extension time. Aviko has played is role in selling almost 100.000 tons of free buy potatoes into the starch industry, helping to substantially clean-up the market.

Entering spring our focus has shifted to the new growing season. With frosts and temperatures below -5oC in the third week of March, there has been no 'early spring' like we have seen in previous years! With today's low soil temperatures, plantings and crop development will be late compared to the average. The clean-up of surplus volumes and the late development of the new crop will bring another dynamic into the market. Rest assured, there will be no shortages and we are seeing better prices being paid for high quality free buy potatoes and the emergence of price differences between bulk and the better quality storage potatoes.

In general, the EU-5 processing potato area for the 2018 crop is expected to shrink around 2 till 3 %. With a 3% decrease, this will see the EU-5 area will shrink from 583.479 ha to 565.975 ha and the production volume is expected to be between 24,2 and 29,5 mio tons. This spread of possible production volumes clearly shows the unpredictable size of the potato production in the EU 5.

With an average yield of 47,2 tons per ha over the last ten years and an estimated acreage of 565.975 ha, the 2018 EU-5 production is likely to be around 26,7 mio tons of potatoes, which will meet demand for the new season.

Farmers are continuing to invest in modern machinery, cultivation, storage methods and equipment to streamline processes in a very competitive and at times uncertain market. Together with the Aviko Potato Grower Committee, we ensure measures are in place to provide farmers with good opportunities for revenue whilst continually improving the raw material to meet the quality requirements of our customers.

This year we introduced the bonus malus system for our farmers contracts to help improve both quality and farmer revenues. A better quality raw material improves the yield in processing, leading to higher customer satisfaction and resulting in an appropriate compensation of farmers' efforts to improve quality.

Jan Willem Peters
Aviko Potato