The European potato industry: A brief overview and future market outlook
During the 2017/18 season, an increase in planted area to 122.8 Kha was recorded. This was the second consecutive year of area increase, following the record low of 112.0 Kha planted in 2015/16.
The potato industry in Europe has continued to consolidate and with this, a growing proportion of pan-European organisations have begun to use European potato growing areas as a singular source of supply, according to information published in the annual Market Intelligence report from the AHDB in the UK.
In its report, AHDB Potatoes says that while similar in some aspects, the continental potato industry in Britain differs from the domestic market in several ways. Compared to Great Britain, a larger proportion of the crop in mainland Europe is grown under contract.
This is probably a reflection of the intended market of the crop, the authors of the report say. Most countries place a greater focus on the processing industry, with a lower proportion of production destined for the fresh/table markets.
In Belgium, the industry is overwhelmingly geared towards production of processing potatoes. Over the last 20 years, planted area has been steadily expanding because of strong demand from the processing sector. The fresh potato market in Belgium is heavily dependent on imports, particularly from France, although in recent seasons the Netherlands and Germany have been exporting increasing volumes into Belgium.
France grows a larger proportion of potatoes for the fresh market than other continental countries and in this aspect has the most similar makeup to the British industry. France is the world’s largest exporter of potatoes and remains an important source of fresh potatoes for many European countries.
Approximately half of the potatoes exported from France are destined for the fresh market (mainly to the south of Europe) and the other half for Belgium and the Netherlands. Here they are processed and then re-imported to France, or exported to other countries as French fries, flakes or crisps.
As in much of continental Europe, most potatoes grown in the Netherlands are utilised by the processing industry. Total production from the Dutch harvest is insufficient to meet processor demand and an increasing volume of potatoes are imported from Belgium, France and Germany to meet requirements. Globally, the Netherlands is the largest exporter of seed potatoes. Dutch seed often directly competes for market share with British supplies, with the customer base for both countries overlapping significantly.
Germany is the largest producer in the north-western European potato area, also producing the greatest quantity of potatoes for the early market. The European processing industry relies on imports of German early potatoes to help meet the demand from factories at the start of the season.
According to the NEPG (North-Western European Potato Growers) last season potato production, excluding seed and starch, in North-western Europe (Germany, Belgium, France and the Netherlands) reached 24.1 Mt – around 2.7 Mt over the five-year average (2013–2017).
Similarly to Great Britain, production looks set to reduce significantly this season. Challenging planting conditions at the start of the year and drought stressing plants during key growth phases will no doubt affect volumes.
Reports currently place yields as being down on average and frequent emergence of quality issues, including secondary growth, means that the proportion of available supplies able to be utilised may tighten even further.
Issues with this season’s crop appear to be widespread in Bintje, a popular processing variety on the continent. Ongoing quality issues have reportedly led to some processors restricting intake of the variety because of the increased workload associated with removing higher levels of tare.
Belgium appears to have been significantly affected by this summer’s weather because a low percentage of the Belgium crop has access to irrigation. German and Dutch production has also suffered, with higher than normal levels of defects and below average production.
Currently, the situation in France remains slightly different to the rest of Europe, with a 3.5% expansion in area helping to offset yield reductions. At the start of October, the French Ministry of Agriculture and Food estimated potato production, excluding potatoes for starch, to reach just under 6.1 Mt. While this is a 6.1% fall from last season, it remains 6.9% above the five-year average (2013–2017).
Approximately 70% of the area in the above-mentioned countries is grown under contract and shortfalls in contracted volumes are likely to lend support to prices in the free market, both domestically and in mainland Europe.
At the time of writing the annual Market Intelligence report, the mechanism by which the UK will leave the EU is unknown. Changes to trade regulations and tariffs have the potential to heavily affect the influence that European production has on the domestic industry.