January has been a quieter month for potato markets. For most in the market, it has been more subdued than historically. Following the EU-exit agreement, exports of fresh potatoes have been able to continue, although there was some disruption at ports at the start of the month, reports AHDB Analyst Alex Cook.
Cook writes that January brings an opportunity to examine how Christmas went for potato markets from a retail and consumer perspective with the use of data provided by Kantar.
Total spend on fresh potatoes increased 6% year on year for the 4 weeks to 27 December. This is the largest spend increase for potatoes, though was less than the 11.7% increase for total grocery spend. Volume of potato sales increased 14% as more families chose to spend Christmas in ‘social bubbles’ adhering to coronavirus guidelines.
One issue however was the decision by some retailers to lower prices (per kilo) of some Christmas vegetables to compete for demand and drive sales to ‘treat items’. This meant the average price for potatoes declined 7% year on year in the 4 weeks to 27 December.
Spend and volume of frozen roast potatoes both declined slightly, but this was heavily countered by a surge in demand for chilled roast potatoes.
Free-buy markets have seen a more muted demand level throughout January. This has come as a result of expected post-Christmas lull and the third lockdown restricting mobility and eat-out hospitality. The rise in infection rates in early January caused consumers to reduce out-of-home journeys. The vaccination programme in place gives optimism for a gradual return in demand once lockdown measures ease.
Contracted material has been prominent in covering January demand. There has been some reports of ‘leftover’ Christmas supplies being used up which has also reduced the need for additional material. The AHDB weekly average price survey (WAPS) has seen lower tonnage levels throughout January in comparison to January 2020.
Packing markets have seen demand centred on retail markets. The lockdown restrictions effecting hospitality has increased supermarket demand. This is particularly seen for best quality material, which has been able to command and hold a higher price.
There has been a high point of demand for Reds, King Edwards and Maris Piper. Supply for Reds and King Edward potatoes is reportedly hard to come by, meaning demand and subsequently prices have increased. Maris Piper seemed to be the shopper’s choice bringing good demand for this variety and subsequently supporting ex-farm prices over “whites”.
Some farm shops have seen a return of customers from December for bagged ware potatoes although not in the volumes seen in March 2020. Potatoes moving to these markets have been able to command a higher price, though quality is paramount to ensure repeat customers.
Processing sectors have seen reductions to demand levels from December. The market has been hit hard by the national closure of education sectors alongside dine-in hospitality.
Some schools, colleges and universities are open for key workers and providing hot meals, with potatoes a key staple. Similar to other markets, contracted material has covered most demand for peeling and frying jobs over January.
Source: AHDB. Original report here