The consumer price index of potatoes reached 144 points in July 2022 (2015=100). This is 10% higher than the consumer price in May, and 8% higher than in July last year. The farm price index reached 162 points in July, the same high as in May. In July 2021, the price index of farm was still at 131 points. The price index of the manufacturing industry increased and reached 144 points in July 2022 (2015=100), 2% higher than the producer price two months earlier, and 26% higher than in July last year.
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Price development
The consumer price index of potatoes reached 144 points in July 2022 (2015=100). That is 10% higher than the consumer price two months earlier, but 7% higher than in July last year. It is expected that rising potato and producer prices will also lead to higher consumer prices at some point.
For the 2021-2022 season, after a year of Corona Pericles, 7% less potatoes for consumption were planted: 71,400 ha against 76,700 ha in 2020. The Cold Spring of 2021 was followed by a warm and wet period in June and the following months were also wet with regional heavy waterlogging. September was dry, and the wet period in early October hampered the harvest. The growing conditions led to normal yields, but also to quality problems and a greater risk of rot during storage. By mid-november 2021, almost all potatoes had been harvested. The total consumer potato harvest amounted to 3.3 million tonnes, 6% less than the previous year. The increased global demand due to the reopening of catering and fast food is leading to a high demand for potato products. The potato market has fallen. In the meantime, the industry increased contract prices for the 2022-2023 season, also because growers are faced with significantly higher costs for Plant Protection, diesel and storage (energy). In addition, the increased grain prices make the cultivation of grain a more attractive alternative. The cultivation area of consumer potatoes increased to 76.9 thousand hectares (CBS) in the 2022-2023 season. For the EU-4 (Netherlands, Belgium, France and Germany), an area expansion of 10,000 ha has been estimated (NEPG). Due to the prolonged very dry weather conditions in July and August, several EU regions (including France) foresee significantly lower yields, which is expected to have an impact on the price.
The potato price of the processing industry has been at a higher and fairly stable level since the 2019 harvest, averaging 116 points. The producer price has risen from 119 points to 141 points in May since October 2021. The potato processing industry processed 45 tonnes more potatoes over the period May, June and July than a year earlier. Increased international demand for processed potato products, supply problems, and increased raw material prices – especially energy, but also sunflower and rapeseed oil, packaging, and logistics costs – translate into higher industry prices. Industry in the Netherlands processed 3.8 million tonnes of potatoes in 2021, 12% more than in 2020 (3.4 million tonnes).
Chain
Table potatoes, chilled fresh and frozen potato products can be bought in specialty stores and the supermarket. Table potatoes are purchased from growers by the potato cooperative or private trade, sorted and packaged and delivered to supermarkets and shops via distribution centers. Sometimes growers or traders also deliver directly to stores. The Lion’s share of Dutch consumer potatoes is processed into french fries, chips and chilled fresh products. The potato processing industry processes more than 4 million tons of potatoes annually and buys the majority of the required potatoes directly from the grower, often on contract. In addition to supermarkets, potato products are sold in (fast food)restaurants and snack bars.
Three-level explanation
Dutch consumers buy about 375,000 tonnes of table potatoes annually, about 80% through the supermarket. For chilled fresh products, the share at supermarkets is 95%. The number of companies processing fresh potatoes for the table potato market (sorting, washing, packaging) is decreasing and stands at around 60 (NAO, 2021). The 5 to 8 larger packaging companies control an important part of the domestic trade; they supply the Dutch supermarkets for 80 to 90%, whether or not through a service provider. A small part of the domestic demand for table potatoes consists of imports that take place mainly in early spring when domestic stocks run out or become less qualitative. These imported early table potatoes come from southern member states such as Spain, Portugal, Italy and Malta. Most of the packaging companies export potatoes, mostly through an exporter. These exports amount to 400,000 tonnes, half of which are destined outside the EU.
Within the processing industry (non-table potatoes), there are four larger companies that process 95% of the volume. They operate globally and have several production locations at home and abroad. Of the 4 million tons of potatoes processed by the industry, two thirds come from Dutch soil and one third is imported. About 85% of potato products are exported frozen, about 80% within Europe and 20% to third countries (Association for the Potato Processing Industry, VAVI). The continuous growth of exports to Asia, among others, means that companies are expanding their capacity.
The number of arable farms growing potatoes for consumption varies between 6,500 and 7,000 (CBS). Partly because of the necessary crop rotation, the potato growers also grow other crops. They produce an average of 3.7 million tonnes of potatoes per year. Potatoes for consumption are planted in the spring and harvested in the period August-October. Potatoes are delivered immediately after harvest or stored on the farm in storage places and delivered on demand. Depending on the variety and quality, potatoes can be stored until June-July, but storage leads to weight loss and sometimes also loss of quality.
Prijsvorming
De consumentenprijs volgt de prijsontwikkeling in de aardappelmarkt af boerderij, maar de relatieve uitslagen zijn kleiner. Dit komt mede omdat de consumentenprijs is samengesteld uit zowel verse aardappelen (tafelaardappelen) als verwerkte aardappelen. Om een belangrijk deel van hun grondstofvoorziening zeker te stellen, bieden verwerkers en handelaren voorafgaand aan het teeltseizoen contracten aan. Ongeveer 75-80% van de aardappelen die de verwerkende industrie verwerkt, wordt vooraf gecontracteerd. Er bestaat een grote variatie aan contractvormen. Omdat verwerkers aardappelen op contract inkopen, kunnen ze relatief stabiele verkoopprijzen hanteren. Producentenprijzen zijn daardoor aanzienlijk minder volatiel dan de af-boerderijprijzen. De marges van de verpakkings- en exportbedrijven staan in jaren met hoge aardappelprijzen onder druk; in jaren met lage prijzen kan Nederland de concurrentie op de buitenlandse markten beter aan. Aardappeltelers verkopen hun product op contractbasis of via de vrije markt. Op de vrije markt worden de prijzen bepaald door vraag en aanbod in de belangrijkste aardappellanden in Noordwest-Europa: Nederland, Frankrijk, Duitsland, België, het Verenigd Koninkrijk en Polen.
A source: https://www.agrimatie.nl
