Potato prices have fallen dramatically as a result of a massive oversupply on the market caused by last year's increased plantings.

On wholesale markets potatoes are 22.3% cheaper than a year ago and 9.2% cheaper than a week ago at £98/tonne [Mintec], while at retail a kilo of loose new potatoes in the big four is 7.6% cheaper than last year at £1.21 [Grocer 33]. Sweet potatoes in multiples are 11.4% cheaper at £1.24/kg.

Fears of a washout prompted farmers to plant more crops last year in the wake of the heavy crop losses suffered in 2007 and 2008 as a result of heavy rainfall and blight. But those higher plantings had combined with better weather to produce an abundant crop.

"We planted too many potatoes last year following a slight undersupply in the previous two years," said NFU horticulture board vice chairman Walter Simon. "Also, growers were not tempted to put wheat in instead last year [because of low wheat prices]."

Some growers were now struggling with lower market prices and were considering whether it was profitable to stay in potatoes, he warned.

"I think some people will stop growing and we'll see a smaller planted acreage this year. I can see the shelf price increasing."

Retailers had taken advantage of the oversupply to heavily promote potatoes, with baking and new potatoes particularly affected, said a supermarket source. "This last year has been a buyers' market and there was the potential to crash the market, but supermarkets didn't do that."

There was a 4.5% increase in the volume of potatoes harvested in 2009, at 6.4 million tonnes, which led to average prices for growers falling 16% to a total of £644m [Defra].

Over the past decade, a year of high production and low supermarket prices has tended to be followed by a year of lower production and higher prices as growers readjusted plantings, said Potato Council senior analyst Jim Davies. "Hopefully there will be a reduction in plantings followed by higher prices."