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End-March 2017 GB Potato Stocks Estimate

Publication Date: 
12 May 2017

Amber Cottingham, Analyst,, 02476 478 698

GB grower held potato stock levels at the end of March are estimated at 1Mt, around the same volume as the end-March 2016 estimate and 300Kt less than the end-March 2015 estimate.

The latest estimate is based on AHDB survey data that covers grower’s stocks only and does not include stocks held by purchasers. Furthermore, when considering comparisons, it is worth being aware that the error margin for the estimate is approximately 12% or +/- 125Kt.

Figure 1 below shows production and stock levels this year and for recent seasons. The lower level of production in 2016 led to the lowest end-November stocks for the last four years, at 2.9Mt. The rate of stock drawdown slowed between December and January but has seen a similar pace to last year throughout February and March. On-farm stocks are now at a similar level to three out of the last five years.

Figure 2 demonstrates the rate of stock depletion.

Looking across multiple seasons, typically the period between harvest (production) and the end of November shows the most rapid rate of depletion in stocks, where buyers look to fill their stores for the coming season. Over the next two periods, covering December to the end of March, the scale of depletion usually slows, but remains at a generally steady pace.

This season, however, saw depletion between December and January slow more considerably, driven by higher farmgate prices. Many buyers were reportedly relying on contracted and own-stored stocks to prevent having to pay the higher free-buy prices where possible. From the end of January to the end of March 2017, the depletion rate looks to have continued at a more typical pace.

How price effects drawdown

2015/16 saw some very high prices paid towards the end of the season, as it became apparent that planting would be late and harvest was likely to follow suit. This therefore extended the 2015/16 storage season. Conditions for ambient storage were also reportedly very poor, due to the mild winter, which meant many stocks had to be sold-off earlier than anticipated to prevent loss from quality issues. This season, however, started with high prices and following the usual post-harvest seasonal decline, prices began to climb. This is unusual as prices are often stable during the autumn and winter, before starting to climb towards the end of the season. With the prices this season climbing earlier than normal, buyers have had to pay the higher free-buy prices for a longer period than would typically be the case. The AHDB WAPS price series (below) shows how prices started to climb from October onwards.

With free-buy prices abnormally high and only 2012 at a higher level for this point in the season, it is unsurprising that there has been some resistance to these from buyers, causing the average prices to move sideways. This lack of certainty in continued price rises will have been exacerbated in recent weeks by the good planting progress made across much of GB (more than 100,000ha planted to 6 May) tempered somewhat by sporadic reports of frost, coupled with not knowing how much is left in buyers own stores.  Therefore, many buyers may be trying to avoid purchases in anticipation of an early harvest.

Concluding comments

The latest estimate suggests GB potato stocks are at a similar level to 2015/16. This level of stocks can be attributed to a smaller crop this season. With planting having been largely un-thwarted by rain and other delays, progress has been good. If the weather is beneficial to crop growth, then the possibility of a normal, or even an early harvest as well as the prospect of an area increase this year (read more here), could subdue prices later in the season. So far this year the weather has been unusually dry which is already causing some concerns for growers. The weather over the next few weeks and into the growing season will be crucial to determine the coming harvest and what this means for industry. All of these factors will be reported on in Potato Weekly as soon as new information becomes available.

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