14 September 2001

Time is right for Brits to recapture market share

Maximising marketable output, cutting costs and improving

agronomy were key themes at the BPCs British Potato

2001 event near Newark last week, as Charles Abel,

Tom Allen-Stevens and Andrew Swallow report

CRISIS is looming on the Con-tinent as processors scrabbling to buy market share drive contract prices way below the true cost of production, says analyst Andrew Fearne of Imperial College at Wye.

But Dutch growers are working to push the price back up, creating an opportunity for UK producers to recapture market share, says BPC supply chain manager Paul Turner.

Pivotal to the low cost potato crisis is the Dutch processors cynical use of cheap Belgian potatoes to undermine Dutch grower prices, says Mr Fearne.

Belgian producers are small, growing 2-3ha of potatoes for the one year in 10 when they make a profit. Family labour is uncosted, farms are paid to use pig manure, no irrigation is needed and investment in machinery and storage is negligible, allowing them to accept rock bottom prices.

"It plays into the hands of Dutch processors, who get Belgian raw material when Dutch growers say the price is too low."

That has sent average prices below average production costs, creating a siege mentality among Dutch producers, with protests and factory blockades and grower bodies urging lower plantings.

Meanwhile, Dutch growing costs are increasing as they catch up with food safety and quality assurance. Land costs are also rising and credit is less readily available.

"The differential between UK and European prices is set to fall," says Mr Fearne. "The Dutch have cut the area by 10% and yields look to be down, which has eased the pressure this season."

farmers weeklys Dutch sister title Boerderij reports ex-field prices up from £31/t on contract last year to £56/t free market now and £65-70/t March delivered. Prices are before tax rebate and for the whole crop meeting a standard of 60% over 50mm.

The time is right to recapture market share, says Mr Turner. "Resist the temptation to jump on the adversarial bandwagon. We need to work together to ensure British potatoes go into British factories."

&#8226 Several processors at British Potato 2001 signalled higher contract prices for 2002.