Outlook 2016: Predictions for the potato sector
Potatoes
Price pressure will remain across most farming sectors next year, predicts farm business consultant Andersons in its Outlook 2016 publication.
Business pointers
- Focus on understanding the potato sector’s complex environment
- Explore new marketing opportunities in processing sector
- Assess true cost of production to highlight areas of improvement
Here Farmers Weekly gives a potted version of what the firm says is important for the potato sector.
As harvest closes, potato yields look promising.
This means the 8% year-on-year reduction in the UK area estimated by AHDB Potatoes is unlikely to be enough to provide the required uplift in price for this season’s produce, according to Andersons director Jay Wootton.
Total UK production is unlikely to reduce proportionately, with above-average yields in many places, he adds.
An early AHDB estimate is for an average yield of 48.8t/ha, which would be a 3.3% increase on 2014’s average yield.
See also: Potato campaign aims to build consumption among younger people
FW says..
- The shortage of a key nematicide in 2016 highlights how few options growers have to control nematodes.
- A factory closure means limited supplies of Vydate (oxamyl) and this will prove challenging, especially for veg and salad potato growers with short cropping intervals who cannot use the alternative Nemathorin (fosthiazate).
- Growers will be forced to change cropping plans, including avoiding fields with high nematode populations or increase areas to compensate for yield loss.
The increase in processing varieties continues to underline the shifting market, says Mr Wootton.
“The issue for UK growers revolves around the future of fresh produce and the ability to access growth in the processed sector.
“Other countries in north-west Europe have a far greater focus on the latter, with only about 15% of potatoes destined for the fresh market.
“With efficient factory facilities these countries are well placed to supply growing UK demand.”
Marketing aside, cost of production remains important to understand, says Mr Wootton.
Calculating the figure from financial accounts is a useful analysis to begin to understand individual cost of production and why it may differ from others, he adds.
“The use of imputed cost of capital, rent and finance and the family’s contribution to paid management and labour gives a full cost to determine the level of true return, although for many growers this is not the measure used to establish viability.
“These factors alone can vary the cost of production of a stored crop by up to £60/t.”
Copies of the full Outlook 2016 publication can be downloaded from Andersons’ website, or request a printed copy by telephoning 01664 503 200.
