Production in the North Western European Potato Growers (NEPG) member countries is said to be down by 6% this year compared to last year. Planted acreage is expected to go down in 2023 because of rising production and storage costs in the four member countries – Germany, France, Belgium and the Netherlands (EU-4).
In a press release, the NEPG says there are big regional differences, with zones in the north of the Netherlands that had very good yields (due to more rainfall, and also widespread irrigation), while zones in the west and north of Germany yields were for the most part on average. Zones in some parts of Belgium and even more so in France had very disappointing yields. In these zones some farmers will not be able to deliver the volumes they contracted for.
Sky high production costs (current and expected) and good cereal prices have prompted many farmers to sow more cereals (barley and wheat). This will have an effect on the potato area.
On average in the NEPG zone, between October 2021 and October this year, electricity prices have gone up on average by 280% (ranging from 50 to 500% increase). During the same period, diesel prices have gone up by 55% on average (ranging from 34 to 95% increase).
When one combines not only the higher production costs, but also the trend of lower yields/ha, then production costs per ton have risen and are rising even more.
NEPG says contract prices and conditions should take these trends into account if processors do not want to risk having less hectares planted and a subsequent lack of potatoes next season.
“One of the ways to pay fair value (contract prices) for potatoes is to work with cost price indicators. Upcoming contract prices could be linked to a range of price indexes (energies, fertilizers, machinery and equipment, contractor’s tariffs, buildings and storage devices…). Another way of seeing things would be to start to look at grower productions costs and use that as a tool to set up contracts.”
Source: NEPG. Read the full press release here