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LAMMA 2021
25 May 2021
Potato prices weak as Covid-19 fears remain
Many potatoes are in pretty good shape given the growing season they have had, but growers will be less impressed with the prices they are getting as Covid-19 continues to dominate the market.
Most crops were planted following the wettest February ever, before enduring one of the driest springs on record.
Summer rain and the ability to irrigate appears to have saved many crops which also had to survive the August heatwave.
Yields for many are average, although there are some signs of heat damage, while recent rain has led to fears of the resurgence of blight.
AHDB Potatoes reported rain has delayed lifting, with heavier land the most affected.
A forecast interspersed with showers could mean a catchy harvest is in prospect.
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Growers will not want a repeat of last year when heavy rain meant that some crops were not harvested before Christmas, with a small area abandoned altogether.
An average crop of 46 tonnes per hectare would deliver a total British crop of 5.474 million/t, which would be 300,000t or nearly 6 per cent more than last year.
Conditions
Strong prices are not cushioning the impact of tricky conditions.
Recent free-buy prices have been at just over £110/t, according to AHDB. That compares to £175/t a year ago and is the fourth lowest early season price since 2000.
In the 21 seasons since the start of the century, the average early season price has been £145/t. The all-average price, which includes contract values, is stronger at £175/t, only £8/t less than last year.
There is a premium for quality with free-buy reds making £240/t compared to £100/t for whites and £150/t for Maris Piper.
Bagged chipping types are fetching about £125/t, less than half what they were a year ago.
Demand dilemma
While there may be no major issues with supply this season, demand remains a concern.
Fresh potatoes fared well during lockdown, with sales in the 12 weeks to the middle of May up more than 20 per cent on the same period in 2019, according to Kantar research figures for AHDB.
About 80 per cent of fresh potato sales are in the retail sector so it was not adversely affected by the shutting down of restaurants and pubs.
That cannot be said for processing potato demand. Retail sales of frozen chips were up, but with up to 60 per cent of processed sales normally to the foodservice sector, general demand was down.
A surplus of potatoes on the continent meant June potato exports were two thirds lower than June 2019 at 7,325 tonnes, according to HMRC figures.
Foodservice
Imports were 16 per cent down at 27,075t. Frozen fry imports down 25 per cent in the month at 40,425t because of reduced foodservice demand.
Despite hotter temperatures during the August heatwave on the continent impacting on potatoes in the ground, prices remain depressed. Early season values are as low as €20/t (£18/t) because of a large carry-over of stocks from last season.
The April 2021 futures price is currently at nearly €80/t (£72/t) suggesting a slight tightening of the market in coming months.
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