Processing potato contracts offered for the upcoming season are too low and stifling reinvestment into the sector, according to one Yorkshire grower.

Potato producers are experiencing some tough times as fresh sales decline, crisping markets stagnate and only processing is offering cause for optimism with steady growth.

This has caused growers to lose confidence in the crop and resulted in very little reinvestment into crucial storage infrastructure and equipment.

Matthew Wallace, arable manager at the 1,200ha Fridlington Farms Estate at Sutton-on-the-Forest, North Yorkshire, said prices offered for next year’s crop would leave very little margin to reverse this trend.

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He added that pricing reductions had been particularly aggressive for crisping potato producers.

“Very little margin leaves very little room for reinvestment, with any slim return going into getting the following year’s crop in the ground.

“It is damaging to the industry and it won’t be able to progress because people can’t build a new store or buy new bit of equipment, except when they absolutely need to,” he added.

The farm grows about 243ha of processing and crisping potatoes and invested in a new 3,000t bulk store three years ago, with 90% of its crop going into store annually.

Static prices

Mr Wallace said he was glad the business was able to invest when it did, with prices remaining static since and he believes contracts need to be at about 18-20% higher than what is on offer, or in the regoin of £25/t.

“Growing potatoes comes with a considerable amount of risk and contracts need to take account of that.

“In relation to the price received for the finished processed product, a small rise would be negligible for the processor. It’s very short sighted,” he explained.

Investment in storage in particular will benefit processors, giving them a constant supply of good quality potatoes year round, but it is estimated that only 20% of the 3.25m tonnes stored annually are in state-of-the-art stores.

“If processors want a crop at the right time through better storage, prices need to reflect that.

“More direct relationships with processors are also needed and they need to look at cost of production when deciding on price too. Looking at our price records since the 70s, the price hasn’t changed, but costs have.”

Have your say

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