Potato yields in Western Europe, including Luxembourg, have increased this season following optimal weather conditions. Nathalie Lamberty, director of the seed potato cooperative Synplants, said, "The sun shone when it needed to, and it rained when it needed to." Despite this, demand has not matched the available supply.
Farmers report that free-market prices are only a few euros per ton. Luxembourg grower Marc Nicolay said that a kilogram of potatoes has production costs of 20 to 25 cents, with additional expenses such as packaging. Nicolay said the broader public perception is not always accurate, referring to what he called "sometimes sensationalist headlines".
Lamberty noted that this year's oversupply is not only weather-related. "In Western Europe, including Poland, 55,000 hectares more potatoes were grown this year than in the previous year," she said. Previous seasons with reduced harvests encouraged producers to increase industrial potato plantings as processors had purchased all available volumes at strong prices. French fries factories in Europe have since faced international competition from markets such as India and China, causing a slowdown in demand while supply has continued to rise.
According to Lamberty, industrial potatoes are currently selling for €55/ton (US$60/ton), and "for table potatoes, it's perhaps €80" (US$88). Many Luxembourg growers are protected to some extent by supply contracts. Nicolay said, "I have sold 95% of my harvest under some form of contract."
Nicolay explained that "the potato market works a lot with contracts," meaning low free-market prices do not immediately affect retail levels. Most Luxembourg growers concluded contracts between December and February for planting in April. The country also does not produce industrial potatoes on a large scale, which reduces exposure to processor-driven price declines. "The regional market that we have here is largely unaffected by the phenomenon," Nicolay said.
Surplus volumes remain difficult to market. Nicolay said, "They can't even find a buyer at zero this year," referring to weather-related excess supply. Good-quality potatoes are instead being used for biogas or animal feed, though growers do not profit from these outlets. "But if there's no market for the potatoes, then it's better to utilise them this way than to let them rot in the corner," he said.
Regarding next season, Nicolay said, "For potatoes, it starts from zero on 1 August every year. Whatever hasn't been processed by mid-August won't find a buyer because the new harvests are already coming in." He added that the industry cannot reduce prices further, as growers must maintain cost-covering production.
Source: Luxembourg Times
