An increase in acreage and yield…but low prices...
The situation at the end of the season effected commercialisation of new potatoes first. Despite arriving early on the market, commercialisation was difficult, provoking a difficult season.
According to the NEPG (North-West Europe Potato Growers) there was a general increase in acreage over Europe : 2.7% in the main production countries (Germany, Belgium, France, Great Britain and the Netherlands). The biggest increase is in Belgium with +6.3% whilst France sees a 3.6% growth with acreage reaching 121,000 ha. Previous seasons saw high interest in production with consumption and exports at high levels.
Yield all over Europe was good, exceptionally good, as was quality….
Harvested volume reached a record 27 million tons (excluding plants and starch), overtaking the last record in 2011. On the Western European market there was a 3 million ton growth compared to 2013, and a 1 million ton growth in France.
Prices are low, extremely low. An important pressure on prices means some weaker farms are threatened.
All segments of the market affected
The sector has noticed the situation and is taking action to alleviate it. They have researched other alternative outlets : animal feeding, food aid and eventually the starch food industry. Other action has also been taken to maintain France’s market share at export.
As for national consumption, the decrease in retail sale price has no real effect on the volume of sales in a saturated market. However the 2013-2014 consumption results are satisfying compared to the last five years : stable volume and plus 12% in price and value. Industrial activity is very good, but prices on the free market are still under pressure and very low, between €15-20/ton (€15/ton for Bintje and €20/ton for specific varieties. Farmers in France under contract with the processing industry have, in theory, nothing to worry about as long as they maintain the quantity and quality. In an abundant season, small quality problems could be heavily penalised, whole lots could be refused. Industries are also receiving supplies from the free market, which in a context of overproduction means they can buy using their own conditions, which is obviously to their advantage. A number of pick ups are late in harvest contracts. Additional contracts out of harvest season will see volumes go… but when? There is very little space for additional contracts.
France is the world’s number 1 potato exporter
Western Europe (Germany, Netherlands, Belgium and UK) make up the main outlet zones, taking in 30% of export volumes. However French potato sales are most dynamic in Southern Europe (Spain, Italy, Portugal and Greece).
Spain has become France’s number 1 potato client. In 2013-2014 France benefited from opportunities to export to Italy and Eastern Europe due to less presence from German production, this allowed France to reinforce their market share in these destinations. French exports increased by 47% to Italy and multiplied by 3.5 to Eastern Europe. Planted acreage hardly increased in 2014 and yield was satisfying. Operators found it hard to establish prices and local producers were in a hurry to commercialise their merchandise. Except for washable potatoes, it will be harder to find French export outlets this year. The non washable potatoes will be in direct competition with available, good quality German production that benefits from lower production costs. There are of course also the effects of the Russian embargo to be considered, potatoes destined for the Russian market, notably from Poland, risk ending up on the export market.
This is not a new situation, however in the short term the possibilities are narrow, traditional markets will not bring sufficient answers. Certain countries such as the Netherlands are expanding their catchment zones to Eastern Europe, Africa and the Caribbean, or Belgium to Africa…
Productions need to be ready for such an unstable situation.