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Tight markets and tight seed supplies in the NEPG

Publication Date: 
17 February 2017

Arthur Marshall, Analyst, arthur.marshall@ahdb.org.uk, 02476 478956

Markets across the NEPG* countries remain generally firm, which would typically be expected to lead to an increase in the area planted for next season. However, the growth of potato area in the NEPG next year could be lower than would be expected, as in much of the NEPG (except GB) there is a serious lack of seed to grow processing potatoes. At the same time, processors on the continent are reported to have yet again increased their processing capacity.

Tight old crop markets

Following the lower NEPG production levels this season, stock levels are generally low also, not too dissimilar from GB. Stock figures for several NEPG countries for the remainder of this season will continue to be released over the coming weeks and months. It is generally expected that the overall quantity will continue to be lower than last year, which is reflected by free-buy price levels around €100/t higher in February than the same point last year.

However, exactly what this means for the supply situation depends on the percentage of wastage from remaining potatoes in store. Generally, quality in store is reported to be good across the NEPG, with wastage or deductions mainly confined to issues such as growth cracks which were already known about. Nonetheless, even where these issues are present, there are some reports in the Netherlands of processors being able to utilize samples with higher levels of growth cracks and be a little flexible with specifications.

Looking ahead, planting conditions and progress in the spring will be important for the market mood. Until the 2017 crop is available, it is widely expected that there will continue to be good demand for good quality stored potatoes. This is also spilling over, especially into contract offers, for first earlies on the continent. Processors are keen to cover requirements with new crop supplies as soon as possible, leading to reports of higher contract prices being offered for July-lifted potatoes in areas such as Germany and the Netherlands.

Uncertain new crop situation with limited seed availability

High prices and tight markets typically lead to an increase in the planted area the next year, but a shortage of seed from major producers such as the Netherlands is expected to constrain this somewhat. In contrast, Scottish seed production has not dropped this season in the same way as continental producers’ output has. This likely means that availability in GB should be more ample – except for those newer chipping varieties for which seed would usually be sourced from the Netherlands.

Growers and processors on the continent are searching for alternatives, such as very small seed (25-28mm), seed cutting, offering more contracts for unusual or new varieties, or using dual purpose potatoes from starch growers. As well as area planted, this could have an effect on both yields and the variety mix of next year’s crop in the NEPG – so the adverse conditions in 2016 may have longer lasting impacts than just this year’s crop.

*NEPG: North-western European Potato Growers (GB, France, Belgium, The Netherlands, Germany)

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