More than Ample Supply of Potatoes Brings Lower Prices

Steenderen, Holland-headquartered Aviko, the nation’s retail market leader in frozen potato products and one of Europe’s top-volume producers and marketers of french fries, posted its latest potato crop report on September 29. As it is quite informative, FrozenFoodsBiz.com is relaying a slightly edited version of the content herewith.

With a 3.1% acreage increase compared to the previous year, 2014 figures slightly exceed the 3% predicted increase. The yield figures based on test harvestings at several farms in Europe’s primary potato growing countries (the EU-5) show a production estimate of 27 million tons – exceeding the last crop record of 2011.
Next to the increased acreages – mainly in Belgium and France – the lack of winter frosts, the early spring and good soil conditions made for almost optimal growing conditions and a potato harvest which is on track to break the previous production record. Aviko’s own test harvestings confirm “above average” production figures.

During June and July the crop developed well, but high rainfall in August led to decreasing dry matter of potatoes in some fields. Although this has resulted in some rejections, the overall crop is expected to be healthy with good tuber lengths.

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Price-wise, the prospect of the new season is for low pricing. Exports of fresh potatoes, which led to increased prices in 2010 and 2012, have fallen behind compared to previous years. The UK, which imported high levels of fresh potatoes in 2012, seems to be self-supporting this year. Russia has also decided not to buy European potatoes, although they face a risk of shortages.

Although it seems that most signals are red, the lower yields and dry matter in processing potatoes mean more spuds will be needed. The low price levels of free-buy potatoes could open up markets for both fresh potatoes and processed products. As farmers are currently less than half way through the main crop harvest, it is difficult to be sure of the final situation.

With the potato harvest starting at least two weeks earlier than usual, the risk of crop failure due to rainfall and difficult conditions seems small. Final harvest figures will be published later this year, and although it remains to be seen whether these will meet the NEPG estimate of almost 27 million tons, it can be assumed that there will be enough potatoes until the spring of 2015 – unless a severe winter, a late spring in 2015, or other unforeseen circumstances changes this view.

“What a difference 12 months makes. After two years of high potato prices, they are now, on the whole, much lower,” commented Mohammed Essa, Aviko general manager for the UK and Ireland. “While potatoes are plentiful, astute caterers will find a way to increase potato servings in order to lower the cost per meal and increase profit.”