As potato growers face some of their most challenging times, Allan Wilkinson, HSBC’s head of agriculture, shares some top tips to help keep potatoes profitable in 2015.
1. Few farms operate at their optimum
Maximise your profits and build cash to deal with the tough times.
2. The difference between the best and worst producers was large – now it’s enormous
The best and worst potato producers show variations in their cost of production of up to £100/t – and simple changes can see huge reductions in this.
3. Does expansion increase or decrease profitability and cash?
Rented land accounts for a lot of potato production but higher levels of rent puts into question whether you are adding to the viability of the farming business.
4. Benchmarking and budgeting are vital
Growers who don’t know their cost of production and cannot budget will get left behind and struggle when times are tough.
5. The biggest variable in the business is you
The biggest difference in many businesses is the decision maker.
6. The customer and consumer are king
The customer is at the heart of everything potato producers do and cannot be underestimated.
7. Charles Darwin was right about dinosaurs – be adaptable
You need to be flexible to bring out the best in your business and to cope with change in the sector.
8. Know who your competitor is, what they do and why
This does not necessarily mean your British counterparts – this is the potato producer abroad, in places such as Belgium. Ask yourself what are they doing and how are they managing to do it.
9. Collaborate with your neighbour
Collaboration is key to share facilities and resources when cash is tight. The ability to pool growers’ thoughts and equipment is vital and helps individual brilliance to be shared.
10. Volatility is here to stay
The potato industry is seeing volatility like never before and this is only going to get worse, so coping with the highs and lows will be crucial.