29 March 2002

Grower risk not rewarded

Target markets are

dominating potato plans

on our barometer farms.

Andrew Swallow reports

POTATO growers shoulder all the risk while retailers pocket all the profit.

That is the situation facing the UK pre-pack potato industry and one which must change, says farmers weekly barometer grower in the west, Sandy Walker.

"We have verbal contracts with some packers which is a good start, but the supermarkets should show some commitment to the crops too. At the moment all the commitment comes from the farmer."

That leaves growers and packers guessing at production schedules. On Mr Walkers farm 8ha (20 acres) of chitted Marfona have already been planted under fleece, targeted at the early set-skin baker market. Lifting is planned to start at the end of July.

But he has no idea if the buyers will be in the market by then. "We wont be able to start lifting until the supermarkets start taking new season produce from the packing lines. Last year they did not want it until mid-August, some three weeks late, because they kept using old crop out of store."

That delay put prices under pressure for the rest of the year, he says. "If you grow a crop for a market then you should dig it for that market. Putting it into store simply delays the problem and adds cost."

Had early pre-pack crops been taken on time returns would have been better and while little was lost in the field last year, the later lifting slips the greater the risk and cost for the grower, he says.

"£20/t more and we would have had a reasonable year. £20/t is only 2p/kg. Consumers wouldnt even notice, but it can be the difference between profit and loss for a grower – it is £400/acre."

Consumer and retailer detachment from the seasonal and regional nature of crops is at the core of the problem, he believes. Labelling set-skin salad varieties as "new" potatoes all year round simply adds to the confusion.

Stronger marketing is needed. Initiatives such as the BPCs "Potato of the Month" are a step in the right direction, if somewhat plain, he says. "But the only potato city folk really recognise at the moment is the Jersey Royal."

More co-operation among growers and packers to control supply and stand up to the retailers must go hand in hand with the marketing. Then, more of the price on the shop shelf could be returned to the farm, he reasons.

Cost plus type marketing simply exacerbates the perception of the potato as a basic, commodity market, staple he says. &#42

"They would not tell us how much it costs them to run their businesses, so why should we tell them what it costs to run ours."

Instead, growers, packers and retailers need to work together to market good quality potatoes in terms of benefits to the consumer such as health, convenience and flavour, he says. &#42

Chitted, fleeced, but not contracted. Lack of retailer commitment leaves growers carrying all the risk for crops such as this field of Marfona, says Shropshire grower Sandy Walker (brown jersey).

Co-op group

Sandy Walker is one of 34 members of Shropshire Potato Growers, a co-operative group with about 1300ha (3200 acres) of crop this year. Greenvale AP is employed as their marketing agent and three agronomists provide specialist potato agronomy for the members. Production is dovetailed with similar grower groups from around the country by Greenvale AP. "Generally, the arrangement works well. Members commitment to the group is 100% of their crop area," says Mr Walker.

Potato plans in other regions

&#8226 Midlands

Midlands barometer growers William and Richard Hemus are growing 20ha of potl atoes this year. The crop is all Maris Piper and despite its dual-purpose capability processing is the aim. "It is easier to market," says Richard. Half the crop is on contract to MBM and half free market. "The contract puts a floor into our production, but the free market crop will be grown to exactly the same specifications." While contracts direct with a processor have been considered, the ability of a merchant to market a load that misses the specification is a comfort. "It would be a worry what to do with a load returned to the farm."

&#8226 North

Catherine Thompson, barometer grower in the north, is growing potatoes again this season, though the future of the crop hangs in the balance due to medium/high PCN in the black sand soils. "If I did not have the store I would not be growing potatoes," she says. Last years crop of Hermes was cleared to Walkers earlier this month with full bonuses and a yield out of store and washed of 37t/ha (15t/acre). A new contract has just been signed through York-based merchant Cockerills for another 18ha. "The contract for next year is £2/t down. It is a bit late to be getting a contract really," she says.