Why spuds are cheap as chips - while wheat prices rocket

Yet the humble spud - a staple grown on our doorstep - is still cheap and plentiful.

Despite this, and with the exception of a brief recovery during the pandemic, there has been a slow and steady decline in fresh potato consumption in the UK. The trend shows no sign of changing - despite this year's rocketing food prices. Meanwhile other - often imported - carbohydrates such as pasta and rice have grown in popularity.

Potatoes growing near the Suffolk coast (Image: James Wrinch)

One of the oddities in a time of turmoil and fears of food scarcity is that while cereal and cooking oil crop prices go through the roof, the cost of a host of homegrown vegetable crops has barely changed.

East Anglian farmers grow tonnes of potatoes. They are a useful break crop from cereal - enabling farmers to disrupt the cycle of weed infestations which can plague their wheat crops. They are also rich in potassium and have been a food mainstay for centuries.

Different varieties provide a host of dishes from crisps and chips, to mash to varieties suitable for baking or salads. Loose-skinned new potatoes were once a huge spring and summer favourite - although retailers now tend to favour set-skin varieties.

This year's East Anglian potato crop is looking very promising - and from a grower's standpoint farmers are very pleased. But prices are low - making some of their crops uneconomical.

This is for a variety of complicated market reasons, explains James Wrinch, managing director of East Suffolk Produce, a grower group producing 50,000 tonnes of ware and 5,000 tonnes of seed potatoes around the east coast of Suffolk and Essex.

James Wrinch, managing director of East Suffolk Produce at Woodbridge (Image: James Wrinch)

Potatoes generally are grown in the UK and consumed here, he explains - meaning that they exist in a category which is entirely separate to the global wheat market.

"Wheat and barley and oil crops - it's a global market whereas the humble spud is quite an insular commodity. Everything we grow in the UK is generally eaten in the UK," he explains. "They are very decoupled."

Retailers can treat potatoes - and some other fresh vegetables - like loss leaders, he adds. "They do ridiculously deep price cuts on veg to get people into stores at Christmas for example."

So while wheat prices have reached up to £356/t compared to £170/t or so in 2021, potatoes are being sold into a much more challenging market.

But from a farmer's perspective, they can be a good crop to grow, he says.

"They are a good part of a light land or any farming rotation where the land is suitable because you can't grow wheat, wheat, wheat," he says. "They are a break crop for the cereals - they allow you to control different weed species."

Potato plants in the field (Image: Archant)

But the cost of inputs - including fertiliser (£1k/ha minimum), seed (£1k/ha minimum), irrigation (£1.5k/ha minimum), labour and diesel is very high, he adds, at around a total of £8,500/ha, while rented storage will put farmers back around £100/t.

And while retailers are very used to working on margins of just 1, 2 or 3%, farming is a highly risky venture and needs a minimum padding of 10% to make the process worthwhile and counter a host of variables including pests and disease. "To be honest, we need 20%," he says.

Farmers tend to grow some of their potatoes under contract and the rest on a free market basis, and this has historically been on a 60/40 basis, he explains. But as cautious retailers don't like uncertainty, for about the last four years they have been placing about 90% under contract, which only leaves room for about 10% of UK potatoes to be picked up on the open market. Various factors are behind the shift - among them retailers' due diligence and a need to track where their produce has come from.

James has written to his growers suggesting they should cut their growing area by about 15% next year to bring the crop into line with current market conditions.

In an ideal world, he would like consumers to have a heightened concern about food miles and seasonality - which would help to put potatoes back on track, he believes.

UK farmers produce around 5m to 5.5m tonnes overall, he says, and that really needs to drop by about 750,000t.

"It's a perfect storm," he says. There are still store potatoes looking for a market, and new potatoes from this year's harvest - which began in May - to add into the mix - resulting in oversupply.

Meantime, the quality of this year's crop is looking "really good", he says, with acceptable yields. But he remains worried that the surplus crop may be difficult to market. Prices vary widely according to variety, he says, with a new season Maris Peer (small salad) potato fetching £400/t versus an old crop baking potato at £120/t. But the cost of production is probably around £200/t for baking potatoes and £350/t for salad potatoes - making the cheaper potatoes uneconomical to grow.

"I do think the potato industry has a big question mark to answer about how to promote potato production," he says.