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GB end-November potato stocks at 2.97Mt

Publication Date: 
18 January 2019

Aidan Wright, Analyst, aidan.wright@ahdb.org.uk, 02476 478 894 

GB grower held potato stocks at the end of November 2018 are estimated at 2.97Mt. This is the lowest during this point in the season since 2016/17 and 0.30Mt above stocks in the same period in 2012. Although production was significantly below average this year, stocks have not fallen by the same margin due to a below average rate of drawdown (see below).

The latest estimate is based on AHDB grower panel survey data looking at stocks at the end of November 2018. This survey covers grower held stocks only and does not include stocks held by purchasers.

Lower than average rate of drawdown from production

Drawdown this season is the lowest since 2012/13, with 1.92Mt leaving grower ownership since harvest. While this is a reflection of a lower production year, with less crop available throughout the season, the rate of drawdown is also lower than in recent years. This season’s drawdown between harvest and grower held stocks at end of November was slower than normal at 39%, three percentage points below average (2013-18).

There are several factors at play which have likely slowed the rate of drawdown in stocks at this stage.

  • Large carryover stocks from last season allowed packhouses to utilise competitively priced old crop supplies well into September, which likely reduced utilisation of new crop supplies at the start of the season.
  • Packhouses and processors have also altered specifications to reduce waste fraction, in order to get the most out of this season’s crop. There have also been reports of fewer retail promotions, such as during the Christmas period, to help manage supply.
  • In addition, many growers delayed harvesting to allow crops to bulk following the drought during the summer, reducing the time prior to November that crops were marketed.

One further factor that likely had an impact is the reaction of growers to production and quality this season. Currently, good quality supplies are priced at a premium and with a low production year, many anticipate prices to rise as the season progresses. As such, some growers are reported to be reluctant to open stores at current prices. However, it’s important to consider that price rises are not a given, even in such a low production year. In May 2017, towards the end of another season of tight supplies, free-buy prices dropped sharply driven by an influx of packing supplies on the market.  

Conclusions

Moving forward, the stock levels at end-January along with planting progress later in the spring will likely set the pace for price movement for the remainder of the season. While the unseasonably warm weather is helping early planting, it is proving a challenge for those with ambient stores. Reports suggest that growers are being forced to move at risk stock due to breakdown, earlier than planned. An increased proportion of lower quality supply entering the market is likely to result in an increased divergence in prices between lower quality and best quality supplies as the season progresses.

We will know more when our next stocks estimate is published early in March. In the meantime, keep an eye out for how the market develops in Potato Weekly, and for more information on storage, please visit AHDB’s storage hub, available here.

For historical storage figures and more detailed breakdowns, visit the potato data centre, available here.

Notes:

  • The latest estimate is based on AHDB grower panel survey data looking at stocks at the end of November 2018. This survey covers grower held stocks only and does not include stocks held by purchasers.
  • For direct comparison the error margin is +/- 8%. AHDB estimates are subject to revision when appropriate.

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