Dutch potato cultivators at the forefront
The Dutch agricultural sector belongs to the most innovative and knowledge-intensive in the world. In part thanks to this, the Netherlands was able to develop internationally to become the second exporter of agricultural products, after the US. In 2015, 6,742 arable farms cultivated consumption potatoes and 2,419 companies cultivated seed-potatoes in the Netherlands. Since 2000, the area of consumption potatoes decreased by 17.9 per cent; the seed-potato area remained the same. North Brabant has the largest area of consumption potatoes with 16,582 hectares. Flevoland took over the position of largest area seed-potatoes from Groningen. Zeeland has experienced a spectacular growth in this field since 2000 (+56.6 per cent). This was partially at the expense of the cultivation of consumption potatoes.
Chips boosted at the expense of table potatoes
In the Netherlands, approximately 375,000 tonnes of table potatoes are sold annually. Almost 400,000 tonnes is exported, half of which to countries outside of the EU. The most important export countries are Belgium, Germany and France. In recent years, the chip industry quickly gained ground compared to table potatoes. This sector invested significantly in expansion of the processing capacity in the Netherlands, Belgium and France. Potato cultivators are willing to sell part of their production to chip processors early and for too low a price. They are trying to increase returns with their other products. ABN AMRO thinks prices for chip potatoes will temporarily increase due to the extreme weather circumstances during the autumn of 2016.
Equal playing field a prerequisite for growth
The cultivation of consumption potatoes does not limit itself to the Netherlands. Belgium, the north of France, northwestern Germany and the UK are also important production areas. When pricing consumption potatoes, both the current mood on the ‘spot market’ and pool and contract prices and forward contracts play their part. Domestic demand barely reacts to price decreases and increases. The supply is strongly dependent on the seeded area and the growing conditions in the Netherlands and northwestern Europe. “An equal playing field in Europe, including in the field of legislation and regulations, is crucial for the Dutch potato sector’s existence. In order to keep quality at a high level, during a time in which fewer chemicals may be used, crop rotation will need to be extended. This applies to both consumption and seed potatoes. Cost price wil rise significantly because of this. It is imperative that entrepreneurs get adequate returns, so they can continue to invest in sustainability and innovation. For example, potato cultivators could work closer together with chain partners. By shortening the supply chain, sharing (market) information will become easier, and a larger margin could be distributed,” says Jan de Ruyter, Sector Manager Vegetable Sector of ABN AMRO. “The consumer increasingly focuses on health, flavour and the origin of the food. Dutch potatoes perfectly fit into this picture. The supermarket shelves also changed significantly — with smaller portions, special strains and cooled products for various target audiences — and that is not even considering food trucks, food halls, pop-up stores, food boxes and delivery services. Potato cultivators are hardly involved in these initiatives, while many supply chain parties are looking for the availability of the product. If producers and buyers succeed in improving their relationship, they could positively boost their returns.” Source: ABN AMRO