NEPG estimate 6 percent less potato production for 2022

November 17, 2022

‘Rains in September helped a good deal of the potato fields to make additional tons late September – beginning of October. Global production is higher than expected, but there are big regional differences. In the North of the Netherlands there are zones with very good yields due to more rainfall and widespread irrigation. In zones of West and North of Germany, yields are mainly on average. Zones in some parts of Belgium and even more in France had very disappointing yields. There, some farmers will not be able to deliver the totality of their contracts.’

Projected total production

The Potato Growers note that the expected yields per hectare in 2022 are more different and spread between countries, regions and farms than ever before. ‘Weather influences such as very uneven temperatures and rainfall distribution, and whether irrigation was used or not, have led to big yield spreads ranging from less than 30 tons per hectare to more than 65 tons per hectare.’

Sky-high costs

Current and expected sky-high production costs combined with good cereal prices have prompted farmers to sow more cereals (barley and wheat), the Potato Growers remark. ‘This will have an effect on potato area. There has not been a single farmer in the NEPG-zone who has not felt the rising production costs during the last months. On average in this area, between October 2021 and October this year, electricity prices have gone up by 280 percent, ranging from a 50 percent to a 500 percent increase. During the same period, diesel prices have gone up by 55 percent, ranging from a 34 percent to a 95 percent increase.’

Cost price indicators for fair value prices

While the costs per ton get higher, NEPG notices a downward trend of average potato yields. ‘When one combines not only the higher production costs, but also the trend of lower yields per hectare, for example due to climate change or soil fatigue, then production costs per ton have risen and are rising even more.’ NEPG indicates that, if processors do not want to risk having less hectares and a lack of potatoes next season, contract prices and conditions should take these cost evolutions into account. ‘One of the ways to pay fair value (contract prices) for potatoes, is to work with cost price indicators. Upcoming contract prices could be linked to a range of price indexes, for example for energy, fertilizers, machinery and equipment, contractor’s tariffs, buildings and storage devices. Another way of seeing things would be to start to look at grower productions costs and use that as a tool to set up contracts. At the end of the day, doesn’t a farmer decide to produce a crop because he can make a profit on it?’, NEPG concludes.

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