Netherlands: Not 150, but 15 euros per tonne, potato prices take a sharp dive

"The early potatoes are currently being harvested," says Pieter Van Oost, an expert at the agricultural organization Boerenbond. Early potatoes are notorious for their instorability and must be processed immediately. Sixty to 70 percent of the harvest goes to potato processors, such as frozen fries manufacturers, under pre-agreed contracts. These contract prices were finalized at the end of last year, when the sector was still doing well, and cover costs. But the remainder of the harvest ends up on the open market, where supply and demand determine the price. And on that open market, prices have collapsed.

"One ton of potatoes costs 15 euros, compared to 150 euros a year ago. That price doesn’t even cover the cost of harvesting, let alone all the other costs," says Van Oost. A hectare of potatoes then yields 600 euros, while the costs (seed potatoes, fertilization, pest control, harvest) easily reach 6,000 euros.

Demand from processors stagnates

The reason the free market for potatoes is collapsing is simple: processors don’t need more potatoes. Demand for frozen fries has been much lower in recent months than last year. The Farmers’ Union (Boerenbond) reports that demand for pre-fried potato products has fallen by 500,000 tons from Belgian, German, and Dutch potato processors.

There’s no clear explanation. Processors point to competition from Asia, where potato cultivation in China and India is booming, and to Trump’s trade war. The strong euro may also play a role, as many frozen fries are exported to countries outside the EU.

Early potatoes represent only a small portion of the supply. Most potatoes are harvested from late September onwards. These are the so-called storage potatoes, which can be stored until late spring. They, too, look set to yield an abundant harvest.