Markets are under strain of oversupply’
Growers sound alarm to BPC UK growers have expressed their concern over current market conditions to the British Potato Council. As in the rest of Europe, the problems arise from an increased planting area compared with last year. “Markets are creaking under the strain of oversupply although prices remain stable,” said information coordinator Rob Burrows. He warned that as the new season planting got under way, growers should first establish contact with buyers to assess their requirements. Currently growers’ prices, which vary considerably according to variety and sample, are in the region of £70-80 tonne for best quality and as low as £20-£30. This compares with over £100-£120 last year. Multiples are selling loose potatoes at around 25p/lb, bakers at 30p/lb, and 2.5kg prepacks at 59-69p. The latest crop forecast shows that wet conditions have slowed down planting throughout the country. Jersey is now 60% complete. Imports are continuing to build with the first Majorcan Lady Christl starting to arrive, joining Egyptian, Cyprus and Israeli crops.
Main crop sales vanish
As the new potato crop is lifted in increasing quantities and selling in the market at between 18p to 20p/lb, the remaining crop is becoming increasing difficult to sell, reports the British Potato Council. In its weekly report, it says sales have all but vanished for anything other than selected product used for the baking market and prepacking. Prices for average whites and reds are as low as £3, although washed samples can still make double. Demand for new potatoes, however, continues to be slow with Jersey anxious to keep the crop under 45,000 tonnes. Lifting conditions are good in Cyprus, which may mean volumes will rise, although exports at this time are still in line with last year.
Growers fear glut ahead
A significant increase in potato plantings confirmed by the British Potato Council this week has made growers fearful for the profitability of the coming season. Rob Burrows, BPC marketing information manager, warned: “We must remember the clear link between volume available and price paid.” The area has risen nearly 5% to an estimated 143,233 hectares compared with last year. However, the survey was undertaken in March and April and does not take into account the effect of wet weather this month. The BPC has already warned that blight could be imminent. The latest crop report does show that this year’s high returns which have given rise to terms such as potato barons’ being bandied about, have encouraged small to medium size growers to plant proportionately far more, while the largest farms have reduced their areas. l Meanwhile, Tesco has reinforced its commitment to sell locally grown produce. It is working with 30 local growers in Pembroke which for the past four years have developed the Puffin brand.
Despite the fact there are no GM fresh fruit and vegetables sold in the UK, the British Potato Council is nevertheless reassuring the public that potatoes grown in this country are free of genetically modified material. Following consumer enquiries, It has issued a poster with the main strapline Potatoes…You Can’t Beat ‘Em So Why Not Fry ‘Em’ and the assertion at the bottom Potatoes that are grown and consumed in Britain are not genetically modified’. The initiative will also support National Chip Week planned between February 21 and 27.
Branston boosts capacity
Tesco’s major potato supplier, Branston Potatoes, which already operates packhouses in Lincolshire and Somerset, has taken over GA Bowskill (Lin Pack) which also serves the chain, following the retirement of owner Michael Bowskill. The move increases Branston’s total capacity by 40,000 tonnes providing it with 130,000 tonnes of which 60% are bought by Tesco, making it the UK’s largest packer. Other shared retail customers are Netto, the CRS, and the traditional wholesale markets. The move was welcomed by Roy Maynard, Tesco’s buyer, who believes this scale of operation will be necessary to meet the challenges beyond the millennium. Meanwhile, despite the wet weather which has hampered lifting, the British Potato Council has reported that the market has continued to weaken and average ex farm prices have continued to fall by £4.95/tonne to a new low of £68.52. Growers are now hoping for a dry October to lift a crop which is still behind last year at this stage. While early lifted crops have the potential to store well, the heavy rain has already raised a questionmark over the long-term condition of the remaining acreage.
Wide price variation at season start
With the season only a month old, potato growers are facing a confused situation with a wide range of quality and fluctuating demand, according to the British Potato Council. There has been a strong demand for the best of the crop making between £100-£120 tonne ex farm for niche markets and bakers. But levels of half this figure have also been recorded for average samples. The position is also fluid because many producers unless they are serving multiples and processors are only prepared at this stage to release small quantities in the hopes that prices will rise. Harvesting is also continuing, despite the effects of heavy rains, although at present at 32,100 hectares this is 5,000 hectares less than last season at this time.
Greenvale for SE Growers Seed potato cooperative
SE Growers has appointed Greenvale AP as sole agent for its exclusive Maris Bard and Pentland Squire varieties for 1999. It comprises predominantly Scottish growers and is finding a resurgence of interest in Maris Bard. The co-op regards obtaining more marketing expertise as crucial in a consolidating market.
Cornwall well ahead
Early planting in Cornwall is further ahead than for many years, reports the British Potato Council. Main varieties are Premier and Rocket, as well as some Lady Rosetta for crisping. However the council warns there is still damage showing up in stored ware which is likely to persist for the rest of the season, although the current cold weather has helped keep non-controlled stores in better condition. This factor has not deterred the Co-operative Group which is poised to launch an on-pack consumer competition featuring Mr Potato Head to boost the sale of bakers from February 18. It will cover 500,000 own label bags on sale in 1,900 stores. Apart from a prize draw, proof of purchase will automatically win a free children’s voucher to more than 100 swimming pools in the UK.
Yields five tonnes per hectare higher than last year
Growers hit by sheer volume UK growers are continuing to struggle, according to the latest reports from the British Potato Council. The sheer scale of increased early crop yields which have already pushed down prices have become evident with its estimate that average yields of 38 tonnes per hectare are 5 tonnes more than last year. There is increased pressure from multiple buyers to push already low prices further down, says BPC. New potatoes are retailing at as little as 9p lb. The BPC has also hinted problems could extend to the main crop, although at this stage high early yields do not necessarily mean a repeat performance. Hot weather is drying out the earth, and if drought conditions continue well into August, the associated stress on crops could be the decisive limitation on 1999. Coupled with localised rainstorms, blight is also a possibility.
Fears of blight remain
While the hot weather has eased the possibility of blight on potato crops, there have been outbreaks in East Yorkshire and part of the Midlands, according to ADAS adviser Nick Bradshaw. “Weather conditions will dictate the pace of development,” he said, echoing the view of the British Potato Council. Meanwhile, prices have continued to fall and are matched only by returns in 1997 and 1998. Producer levels are down to an average of £56.71 a drop of £4.66 on last week as yields continue to rise, currently 32.6 tonnes per hectare compared with 26.7 tonnes last year. Early crop comparisons now becoming available are equally gloomy. Although 239,880 tonnes have been sold (223,280 tonnes in 1998), average prices have been £82/tonne compared with £155 last season.
Industry needs more transparent systems’
The potato industry needs to set up systems of supply and payment which are fair and transparent to everyone, claims Tony Worth, chairman of AH Worth Farms, Holbeach, which also packs and markets for other growers through its subsidiary QV Foods. Sales are worth £50m with Sainsbury and Tesco being key customers, as well as Marks and Spencer through a joint venture with Geest. Worth told a conference the industry needed mechanisms which would give everyone confidence in order to escape from the vagaries of a commodity market. Its own members are rewarded with a basic price guarantee and assured market through its Premier Club. Meanwhile sales of bakers have risen due to increased supermarket promotions, said the British Potato Consortium. Ex packhouse box prices are £3.10-£4 for 40s and 50s. Average weekly potato prices have risen to £83.62/t, a £1.39 rise on last week.
Total potato stocks in the UK at the end of February were 2,516,000t compared with 2,528,000t at the same time last year says the British Potato Council. However last month wastage has been found to be much higher and is now averaging 18%, nearly 4% more than last year.
Bakers in short supply
Shortage of good sized baking potatoes continues as skin set remains a problem for many growers, according to the British Potato Council. Prices have already reached £10/15kg carton for best sizes. Multiples are pricing baking potatoes as high as 93p/kg. This has led to many crops either being lifted early or burnt off in the hope that the product will be available. Meanwhile BPC has announced the initial planting estimate this year at 149,249 hectares is below the four year average of 150,199 hectares and 4.1% less than 1999.
BPC calls for more recruits to adopt stores
More volunteers to keep an eye on how well supermarkets are promoting potatoes have been called for by the British Potato Council as part of its Adopt a Store’ campaign. Supporters must pay a call at least once a fortnight to their chosen local store and work with staff providing point of sale material such as recipe cards and fact sheets. The scheme has been backed by all the multiples, with over 100 stores already adopted. l Branston Potatoes and WCF have established a new alliance to coordinate their Tesco business as a joint operation. Accrued benefits will include greater flexibility and increased procurement capability. Between them they are the multiples’ largest potato supplier delivering over 130,000 tonnes annually from sites in Lincolnshire, Somerset and Tayside. According to Eric Richie, commercial manager for WCF, the alliance will be particularly beneficial for Scottish growers who will now have the potential to supply prepacks. Tesco buying manager Roy Maynard welcomed the new arrangement: “The factories and network of growers are ideally located to deliver on quality, price and service.”
Fast work on the harvest
The first warnings have been sounded by the British Potato Council that there may be early breakdown of the crop while it is still moving into storage. With the mildest October on record, a combination of slow skin set and wet conditions are likely to be the cause. Wet rot has already appeared in Maris Piper. Growers have also moved faster this year to harvest the crop after a late start. The BPC estimates that 92% (135,700ha) has been harvested compared with 71% (103,700ha) at the same time last year. Prices have remained steady on the wholesale markets at £3.80 to £4.50 per 25kg for red varieties despite a lack of tourists hitting foodservice. Meanwhile, as part of its autumn promotional package, the BPC is linking to multiples which will be stocking four million potato bags providing free prizes ranging from weekend breaks to salsa dancing. Sainsbury is also testing trolley advertising in 20 of its stores.
Taypack opens new facility serving Asda
Taypack Potatoes, Asda’s lowest cost fresh potato packing operation in the UK, had its new Perthshire packhouse officially opened this week by Mike Snell, general manager produce. It services three Asda depots, at Grangemouth, Washington and Wigan, supplying 94 stores. Built over the last 18 months at a cost of £3.5m, the project received over £500,000 in grant assistance from the Lowland Scotland Processing and Marketing Scheme. Taypack annually procures around 160,000t of potatoes from 100 growers, the majority of which are within a 50 mile radius. Ten of these, representing 10,000 tonnes, grow for Asda on a cost-plus basis, geared to a base price and bonus on packout. Currently, they are getting around £90-£100 tonne, £30-£40 tonnes above the physical commodity trade.
Main crop planting is up
Planting for this season has reached 146,479 hectares 7% higher than last year, according to the British Potato Council although the number of smaller producers continues to decline. Most of the increase has been in main crop, yet to be sold, which is up by 8.7%. Maris Bard at 3,255 hectares was the most important early variety. Overall, this sector recorded a 3.4% drop, although it was compensated by slightly more second earlies, with Estima being the most popular variety 14,300 hectares out of 36,894. The main crop of 89,098 hectares was reliant on Maris Piper, accounting for more than 27,000 hectares. The next most substantial were Cara, Saturna, Pentland Dell, Desiree and Lady Rosetta.
Consumers continue to get wider choice
Belgian potato growers are planting more niche market waxy varieties. Over 2,000t under the Flandria brand will be available for importers to purchase through the auction system this winter. The move is a further indication of how the market is continuing to fragment giving customers a wider choice. The varieties chosen include Charlotte, Pompadour, Rosa, Roseval and Franceline. l The British Potato Council has estimated that total plantings in the UK this year are only 1% down on last year at 147,947ha. While first earlies and main crop are marginally down, this is made up for by a 9% increase in second earlies. Premier is now the most widely grown first early, followed by Maris Baird. Marfona tops the second earlies and Maris Piper is far and away the most popular main crop.
Jubilee lift for Elizabeth
A new salad potato, Elizabeth, has come to market and is on sale exclusively in limited quantities at Sainsbury in time for the Queen’s Golden Jubilee celebrations. The potato, which is reported to be disease resistant, is the product of a partnership between Agrico and Solanum to develop new strains and is initially being raised in Suffolk under fleece.
Fresh set to be overtaken by processed
Consumption of fresh potatoes is likely to be overtaken by more convenient processed counterparts by 2005 according to David Walker, chairman of the British Potato Council. Last season over 6,000 growers planted a 132,000ha crop which together with imports led to a 106kg annual per capita consumption, one of the highest in Europe. Inevitably potato growing has become a high risk business, he told the industry at its showcase conference and exhibition held in Newark. “If the industry overproduces by 5%, it can mean a downward price move of 50%.” And while imports had been relatively flat over the last decade, there had been a decrease in early potatoes. Latest crop news is of reduced Continental planting, with UK price differentials closer than for many years. However with UK lifting still continuing with around 20% of the crop harvested, this may change. Main crop yields are still varying widely, between 27-80 tonnes plus/hectare. On the market prices are static, with washed potatoes making around £4-£5.25/kg.
Jersey liftings start next week
The first Jersey new potatoes will be lifted next week, the British Potato Consortium has reported. These are distinct from those grown under glass which are already in stores in limited volumes. Planting intentions for the UK potato crop overall point towards an improved balance between supply and demand compared with the current season coming to a close. Some 67% of producers report they have committed customers and there appears to be a 7% planting reduction spread across the industry. “However, the impact of higher yield on a reduced area cannot be discounted,” said BPC. “The five-year average is 43.9 tonnes/hectare. Any increase of more than one tonne would still see the crop in excess of 6.5 million.” In its European crop round-up, BPC also estimates that Egyptian exports to the UK will be 25% lower than last season, reaching 30,000 tonnes. The reason with the season already under way, with 20kg bags making around £6 on the wholesale market is that lifting started late. There are also reports of brown rot in the Netherlands.
High risk of blight feared
Scottish potato scientist Ruairdh Bain has forecast that there could be a high risk of potato blight affecting 80% of the crop next season, meaning early control strategies will be critical. Bain will be attending the first technical conference being organised by Anglian Produce at Shuttleworth College Bedfordshire on February 18. Latest news from the British Potato Council is that, as expected, current crops in store are showing signs of damage which include bruising, sprouting, greening and soft rot. This varied between two and 45%, although the average of 15% is only marginally ahead of last year’s damage levels.
Israel tests UK’s best known
Israeli growers will be testing the potential for several of the UK’s best known main crop potato varieties, such as King Edward and Maris Piper, in the light of continuing reports that the remaining British crop is facing quality problems. Other main crop varieties which have been making headway include Red Gem, as well as a range of bakers for the specialist market which are based on Cara, Valor, and Marfona. Yaniv Yablonka, Agrexco’s potato product manager, said that several supermarkets were looking for alternatives in the spring. These varieties will be shipped in one tonne bags or boxes for prepacking in the UK, similar to Desirée, already established and available until June. He added that there were plans to increase UK sales of the winter/spring crop. The main variety, Nicola, will reach 22,000-23,000 tonnes, and there is also expansion planned for Vivaldi, which could rise to 6,000 tonnes. Agrexco has also launched a new 12.5kg window bag carrier for the wholesale and catering sector containing 40-60mm unwashed Nicola.