Job Offers

Specials more

Top 5 -yesterday

Top 5 -last week

Top 5 -last month

Appealing, necessary or complicated?

European potato sector responds to NEPG call to reduce acreage by 15%

Just over a week ago, the North-Western European Potato Growers Association (NEPG) sent out a call. They want the sector's acreage to be reduced by at least 15% for the 2021/2022 season. This is an emergency measure to nip the effects of the coronavirus in the bud. For instance, the hospitality industry has been closed. But does this measure offer real relief? How realistic is the NEPG's appeal?

The Netherlands: Less acreage welcome
The Dutch potato sector is very reluctant to respond to the requested reduction in acreage. Keimpe van der Heide is a Dutch Arable Farming Trade Union (NAV) board member. He also chairs the Producer Organization for Consumer Potatoes (POC). He's willing to respond; calling the NEPG advice sensible. "Our calculations, too, show that a 15% reduction in the acreage is desirable. At the end of the 2019/20 season, potatoes were selling for €0,03 to €0,04. Nobody can grow potatoes for that. I, therefore, certainly expect the acreage to decrease."

"It remains to be seen whether that will be by as much as 15%. Such a shrinkage will affect potato farmers significantly. But, cultivating potatoes at a loss doesn't benefit anyone either. A 15% acreage reduction doesn't guarantee an upturn in the market situation. It does, however, increase the chances of that happening. Ultimately, it's mainly the weather conditions that determine yields. But growers can't control the weather. They can, however, control the acreage. Grain prices have been much higher than in recent years. That could work out well," Keimpe says.

Belgium: Sensible to reduce acreage
Geoffrey Delbaere of Warnez Potatoes in Belgium would welcome a 15% acreage shrinkage. "We plant potatoes in February and March. At that time, COVID-19 wasn't yet so pertinent. A few weeks/months later, it put the whole industrial potatoes market under great pressure. The hospitality industry was locked down, and large events canceled. So, supply was much greater than demand. That put prices under tremendous pressure. As things stand, we're not rid of the virus yet. That makes it wise to reduce the acreage."

“Warnez supplies 95% of its potatoes to the retail sector. That market is even increasing slightly since more people are cooking at home. So, we'll certainly not decrease ware potatoes acreage in the coming season. The call is more for farmers who grow potatoes for the processing industry. A cut-back will also be necessary for those who supply table potatoes for the hospitality industry."

"There's sometimes an overlap between the fresh and the processing potato market. Frisian potatoes no longer sold to the industry end up on the free market. That causes prices to drop. Warnez mainly works with contracts with our growers. These low free-market prices, therefore, affect them greatly," says Geoffrey.

Germany: Acreage reduction needed, but only between 10 and 12%
The NEPG appeal was presented to Karl-Josef Dammer. He runs Weuthen, a German potato trading company. He's also responsible for the general reduction of European potato cultivation in this time of crisis. "However, as quickly as the demand has disappeared, so will it return."

"We're talking about potatoes that will be harvested from July 2021 onwards. How the coronavirus will have developed by then can hardly be estimated at present. We'll also need those potatoes until the summer of 2022. That's why I wonder if this is the correct advice."

Dammer is also convinced the potato area will shrink in the coming year, even without this stringent measure. "Especially farmers in regions that are far away from the processing industry will do so in the next year. These areas include Hesse, Lower Saxony, and East Germany."

Those in this branch of the trade have to rely on daily prices. These have been very disappointing for the past two years. These growers are currently struggling with liquidity problems. And perhaps also with cost-covering contracts.

A definite 15% decline in potato acreage is not realistic, according to Dammer. "You can't translate this in North Rhine-Westphalia, the Netherlands, and Belgium. As far as we're concerned, an area reduction of only 10-12% is needed."

France: Cutting back in size is complicated
The potato industry is facing many challenges. That's due to the March lockdown and the second lockdown implemented at the end of October. Despite this, the French ware potato industry is still quite good. Prices are at the correct level, and consumption is reasonable. This could, however, be better. The two markets are connected. Even so, the crisis has spared the ware potato market for now. With winter approaching, consumption in France will increase again, too, as will exports.

It's complicated for some growers in some French production areas to reduce their acreage. These regions include Champagne, an area strongly oriented towards the consumption market. Acreage reduction would be beneficial at all to these farmers. So, not all French producers will follow the NEPG's advice to reduce the acreage by 15% next year. Naturally, that depends on their situation and target market.

Publication date:

Receive the daily newsletter in your email for free | Click here

Other news in this sector:

Facebook Twitter LinkedIn Instagram Rss

© 2021

Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber