Potato prices under pressure despite 7.8% area drop

There are plenty of potatoes about, despite the 7.8% drop in area, putting prices under pressure.

AHDB Potatoes overall free buy and contract average price fell again in the week to 16 October.

It lost 1% to stand at £139.10/t ex-farm while the free-buy average was also down 1% at £144.24/t.

Growers would need to work hard to make the best of ordinary samples this year, said advisers.

Although yields are variable, they are generally better than anticipated. AHDB Potatoes expects to give a yield estimate late next month.

See also: 10 top tips to improve your potato business in 2015

The 7.8% area drop would not represent a corresponding drop in supply as it was likely that the worst land would have been taken out, said Jay Wootton a director with consultants Andersons.

A two-tier market was likely to develop, he said, where those with quality potatoes would come out all right in terms of return. For others it may not be a very bright year.

“You can have an unprofitable year on potatoes if the rest of your crops are making money – but if everything else is unprofitable and you have an ordinary potato year, then it’s a problem.”  

“You can’t make a silk purse out of a sow’s ear, you need to understand what it is you’ve got and where to pitch it”
Jay Wootton, Andersons

There was more enthusiasm by growers for processing contracts, said Mr Wootton, after several seasons of producing basic whites for packers and not getting decent returns from this.

His key advice to growers with 2015 crop to market was to be objective about what they had in store and what job it might do.

“There should be more than an adequate supply this year, although there are some issues in the crop,” he said.

“Fresh demand is still falling and there’s no significant growth in processing demand. We will be in for a pretty ordinary year, with a lot of ordinary samples around and they don’t improve in store.

“You can’t make a silk purse out of a sow’s ear, you need to understand what it is you’ve got and where to pitch it.”

Despite earlier prospects, potatoes were less likely to bail anyone out this season, he warned. “If people are looking for finance, there will be a lot of very careful scrutiny by banks, particularly if people are looking to finance losses.”