Perfect storm looms over the potato market

It can change in the potato market. In three weeks time, the potato price has almost halved. Where in week 7 €30 was noted on the leading Belgapom in the EU-4, this morning (March 7, week 10) it was €17.50. The potato price has thus dropped below the €20 mark and also well below the cost price of many potato growers.

The big question is: who will catch the falling knife? It is rare to see all negative ingredients in the market come together like this. The last time was during the outbreak of corona when the market completely collapsed.

Spring
Where the past two years spring provided an impulse for the potato price and spring was extremely late and wet, the opposite seems to be the case for the 2025 harvest. The winter was relatively dry, with even some light night frost, and now the spring weather is early and beautiful. According to the weather forecasts, this could continue for a while. Good structure with high temperatures is providing a flashy start in the early cultivation areas.

Early cultivation areas
This week, the areas in Bordeaux will be almost fully planted. In the Palatinate, work started this week and next week they expect to be able to start in the state of Rhineland. It has been a long time since such beautiful conditions allowed for such an early start to the season. If the weather remains good, the main harvest will eventually be planted within the next three weeks. Of course, this does not say anything about the final yield, as anything can still happen (frost, drought, etc.).

Export
Potato exports have also come to a standstill in recent weeks. It was going relatively well, with good demand from various parts of the world, but that seems to be no longer the case. Especially the export to Africa has come to a halt due to a large supply from Egypt. Insiders whisper that these are potatoes that were intended for the European market but have been canceled, so they are now being offered on the African continent for any money.

Processors' coverage
Ultimately, the main demand for potatoes in Europe must come from the processors. During the off-season period, seasonally, there was overcoverage by a considerable number of processors. This created a bulldozer effect on the market, and even lowering the price could not stimulate more demand. The price dropped well below the cost price and is equal to the current price level of Belgapom.

Most processors also had good coverage for the storage season. It was assumed that the demand for fries would be at least as large as in previous years and even slightly increase. With a slight increase, additional purchases would still be necessary at the daily price. Just before Christmas, there was extra demand for certain specific potato varieties (Innovator) from a limited number of processors. The coverage was sufficient but not for specific varieties. This rush for fast-food varieties dragged the rest of the potato market along.

Belgian processors remained hesitant to increase prices (resulting in much grumbling among Belgian growers). However, Belgian processors had no need for fast-food varieties. Their sales were mainly in Fontane-like varieties, and there was (is) sufficient supply due to, among other things, quality issues. When the coverage of fast-food varieties was realized in early February, demand in its entirety also disappeared from the market. No demand for potatoes and a lagging sales of the end product (and thus the growth of the fries stock) led to a complete collapse in demand. Result: sharply falling prices.

Opportunities
Now that the market has entered a sort of perfect storm (early spring, large coverage, faltering demand, and moderate export), the question is what the market will do next. Much will depend on the recovery of the fries market. Geopolitical opportunities and threats also play a role. If Trump unleashes a trade war, it could also offer opportunities for the export of fries from Europe to other parts of the world. The eventual potato stock until the end of the season will also be decisive. If there is a lot of waste or rejection at these low (below cost) prices with a possibly moderate growing season in May and June, opportunities can always arise in the end. However, stabilizing in the short term is the best thing the market can do.