Oversupply leads to new crop potato price slump

New crop potato prices have slumped in recent weeks, leaving growers facing massive losses.

The Potato Council’s free-buy average price fell by 14% in the week to 29 July, to £105.54/t – £81.80 below last year’s buoyant values. The weekly average, including contracted material, fell by 3%, to £139.14.

However, this hid a much more marked decline for free-market potatoes, which dropped as low as £40/t in bulk ex-farm, said traders. The problem was a marginal increase in plantings, to 127,453ha (314,809 acres), combined with an excellent growing season bringing the maincrop harvest about two weeks ahead of normal.

As of 29 July, farmers had moved 290,399t at an average yield of 34.9t/ha (14.1t/acre) – compared with 246,751t at 29.2t/ha (11.9t/acre) last year, said Jim Davies at the Potato Council. “A lot of varieties are available earlier than last year, and samples are bold with high baker contents.”

Free-buy supplies were currently ample and, with most purchasers sourcing on contract, markets had plummeted, leading some producers to put set skin material into store until later in the season.

Richard Solari, who grows 120ha (300 acres) of potatoes at Heath House Farm, Beckbury, Shropshire, moved Lady Rosetta on contract at £125/t this week. “Having filled my contract I was offered £40/t for the same potatoes on the free market. That is ridiculous.”

Mr Solari urged growers not to panic sell at such low prices.

“Growers have got to keep their heads and only lift to order.” Long term, he reckoned the industry should cut the potato acreage by 10-15%. “We need at least £5,434/ha (£2,200/acre) to cover costs, and that is going up all the time. With cereal prices where they are this is a good opportunity for people to find a more profitable alternative, and only grow potatoes for a confirmed market outlet.”

James Hopwood, account manager at Branston, reckoned the oversupply was not as great as some people thought. “The processors aren’t using as much as they could at the moment. There isn’t a massive excess and I don’t think we can afford to lose many more growers. I think prices will increase as we go forward into storage.”

Richard Marcroft, commercial manager at McCain, said it was too early to tell if the oversupply would continue throughout the season. “We are only a month in. We have a long way to go; the next two to three months will be the key.”

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