Analysis Potatoes
If only I were an Innovator, every potato thinks
The beloved fast food variety Innovator is further distancing itself from bulk scratches in the potato market. Even the premium variety Agria has to take a hit when it comes to pricing. The entire market is particularly noteworthy. The increases follow each other rapidly.
Now that we know that PotatoNL will resume on January 6th with the compilation of an 'official' Dutch fry potato price, the collaborating exchanges LNCN and Goes decided to start off with a bang. They published an indicative price on Monday, December 23rd, ranging from €20 to €37.50 per 100 kilograms for fry potatoes. An increase of €7.50 from the previous week. It should be noted that this transaction applies to Innovator.
Such a price can be considered quite remarkable. It was Farm Frites that not long ago (December 12) came out with a tender and paid this price for delivery in March and €30 for immediate delivery. A lot can happen in ten days.
Top segment
It will be interesting to see what the countries around us will do with their Innovator prices. The German Reka is already quite high at €30. Especially compared to the Belgians and French, who remain at €20 and €25. Probably a difference is also taken into account between bulk fries and the top segment, in which the aforementioned Agria also operates. In the Netherlands, Innovator was not too long ago under political fire. The fact that the market ignores opinions is evident.
For two consecutive years, the European potato price followed a fixed course. The season started well below the cost price level, only to recover during the storage season and remain stable for a long time. Twice the price soared to €60 in the last weeks of the old season. Last year, the price also peaked in the last week of the year. There is a strong possibility that we will see a repeat and whether this threshold will be breached as easily as the €20 barrier.
Futures market rises
The question now is how the market will develop in the first weeks of 2025. With very low trading volume, the futures market has clearly climbed out of its slump. On Monday, December 23rd, the April contract closed at €29.80, after gradually rising in the past week. With a physical market developing rapidly, the question is how the price for April will take shape and whether the physical potato price will continue to rise.
An important gauge and trendsetter for the market are the potato contracts for the new year. The two largest Belgian processors, leading in Europe, have already publicly announced their strategy. Both are focused on stability. While the fry market may have cooled slightly, they certainly do not need fewer potatoes. As expected, contract prices in the off-season segment are slightly decreasing, while long-term storage is being encouraged. It is expected that the Dutch processors will only announce their contracts in the new year and follow the Belgian trend.
Benefit
With the current and future contract prices, potato growers can establish a stable foundation for cultivation, hopefully supplemented by a good free market price. Of course, you must have free kilos to take advantage of that market. In the current season, this is a challenge for some growers, as yields vary greatly and are not favorable everywhere. Knowing your cost price, hedging risks, and keeping room to benefit from a free market remains the advice.
