Potato growers hit by over-supply

Fiona Fell, chair of the Potato Council

Fiona Fell, chair of the Potato Council - Credit: Submitted

Poor prices are hitting potato growers’ bottom lines after a combination of factors resulted in an over-supply in the fresh sector this year.


Potato - Credit: Getty Images/iStockphoto

The Potato Council said two seasons of over-supply were causing “great pain” among growers. Potato Council chair Fiona Fell said a good growing season last year resulted in a 5.7million tonne crop, 3% up on the previous year. At the same time, sales have fallen by 8%.

“The industry has been successful in reducing supply chain waste and, coupled with a drop in fresh potato consumption, this results in a new base level for production, well below what we have been used to,” she said.

The UK’s high stocks have been placed under further pressure by a north-east European crop of 28m tonnes, which is 4m above the five-year average.

Farm prices fell to a new low of £77 a tonne in January, compared to £152 a tonne at the same point last season.

Edward Blanchard, managing director of Three Musketeers at Bentwaters, Woodbridge, a marketing group for six potato growers in the area, said they had responded by reducing exposure through taking on specific contracts. The business, which celebrates its 15th anniversary this year and grows around 5,000 acres of the crop, will be cutting the area it grows by about 10% and its volume by about 15 to 20%, he said.

They would be out there promoting the crop with their customers, he added, and felt positive as the business was helped by its good relationships with buyers and a reputation for producing good quality crops.

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The business specialises in producing early crops. New potatoes make up about 15% to 20% of the UK market, and it harvests these in May, and white potatoes, which make up 60% of the UK market, in early July. “It’s the right product and it looks good and it tastes good,” he said.

Three Musketeers grower Richard Pipe, of A W Mortier at Alderton, Woodbridge, who grows about 400ha of the crop, said he would be growing about a fifth less of the crop this year as a result of the price drop.

“It’s supply and demand. I’ve got no issue with it. That’s life,” he said. “This is not a one year effect. It’s the culmination of three years that’s led to the situation.”

There was a poor yield in 2012 resulting in high prices and consumers turning to alternatives, he explained. The following year, the overall UK crop was a little below average, but last year yields were high at a time when there was a contraction in market. As a result, his potato harvest turnover fell by about a third.

“There’s nothing unusual about this, it’s supply and demand, full stop,” he said. “We had a poor season last year because of over-supply generally.”

Tim Papworth, who grows around 350 acres of potatoes near North Walsham and is vice chairman of the National Farmers’ Union’s horticultural board, said consumers were going to stores more often and buying potatoes and other products in smaller quantities. However, on the processed side, potato consumption was growing slightly year-on-year.

It was “tough” for growers, he admitted, but they were used to the ups and downs of the market.

Mrs Fell encouraged growers to grow only what they can sell. France, Germany and Spain had all reported declines in fresh consumption, she said, but UK consumption had begun to stabilise, with fresh retail volumes rising by 2% year-on-year in the quarter to January.