Potato prices in A Limia, one of Spain's main producing regions, have fallen to about €0.12 per kg, a level producers say does not cover production costs.
Farmers report that potatoes sold outside contracts are trading below cost. Potatoes covered by contracts under the Protected Geographical Indication (PGI) scheme are selling for about €0.35 per kg, but these volumes represent only part of the cultivated area.
Producers traditionally secure contracts before the season. In recent years, this practice has declined as open market prices increased. According to growers, the current market situation has reversed that trend.
Between 2023 and 2024, potatoes that now sell for €0.12 per kg were sold for about €0.50 per kg. The difference between open market prices and contractual prices of around €0.35 per kg led some producers to reduce volumes committed to contracts.
Farmers participating in the PGI program can access contracts managed by the organization. José Manuel Gómez, president of the PGI, said most contracts this year were agreed at between €0.30 and €0.40 per kg.
Gómez said those contracts have been fulfilled but warned that producers outside the PGI scheme are selling potatoes below the estimated production cost of about €0.25 per kg.
Production costs may increase further following flooding in A Limia. Gómez said heavy rains washed nutrients from the soil, requiring increased fertilizer use. He also noted that some fields remain waterlogged when cultivation should already be underway.
Growers are concerned that contract prices may decline further. According to local estimates, if the Kennebec variety falls below €0.30 per kg or Agria below €0.20 per kg, manual harvesting would be difficult due to labour costs.
Despite market conditions, production under the PGI label continues to expand. Antonia Calvo, owner of "A Casa da Pataca," said much of her production has been placed under the certified system. She said the cost of producing one kilogram of potatoes is about €0.25, including labour.
The situation has created uncertainty in A Limia, where potato production is a main agricultural activity. A regional irrigation system project worth more than €40 million is under development, but growers remain concerned about the outlook.
Some producers say prices could fall further. "We're going to end up selling them for 8 cents. This year has been a disaster," they said.
Growers also point to competition from imported potatoes, particularly from France, as a factor in the market. They also note potential effects from the proposed Mercosur trade agreement.
Weather conditions have also affected the crop. Heavy rain at the beginning of spring delayed planting, and high temperatures early in summer affected tuber development. Farmers also report that existing irrigation canals are currently unusable.
Some growers say market conditions are encouraging a focus on certified production. "With the change in consumption trends, today we must prioritize quality over quantity," said José Manuel Gómez.
Source: laregion.es / Argenpapa
