The NEPG Estimates for the Global Potato Production in 2022
The NEPG predicts a 6% decrease in global potato production in the NEPG zone (EU-04) in 2022 compared to 2021.
“Rains in September helped a good deal of the potato fields to make additional tons late September - beginning of October. Global production is higher than expected, but there are big regional differences, with zones in the North of the Netherlands with very good yields (due to more rainfall, and also widespread irrigation). In zones of West and North of Germany, yields are mainly on average. Zones in some parts of Belgium and even more in France had very disappointing yields. In these zones, some farmers will not be able to deliver the totality of their contracts,” according to a NEPG press release.
Yields per hectare varied and fluctuated more between nations, regions, and farms in 2022 than ever before. Large yield spreads, ranging from less than 30 t/ha to more than 65 t/ha, have been caused by local weather impacts (irregular temperature and rainfall distribution) and the use or non-use of irrigation. Depending on initial stock estimations within the NEPG zone, overall production may be fine-tuned within a few weeks.
Farmers have sown more cereals (barley and wheat) due to high production expenses (both current and anticipated) and high cereal prices. In the past few months, the increased production costs have been felt by every farmer in the NEPG zone.
“On average in the NEPG zone, between October 2021 and October this year, electricity prices have gone up by 280% (ranging from 50 to 500% increase). During the same period, diesel prices have gone up by 55% (ranging from 34 to 95% increase). A downward trend of average potato yields and yet higher costs per ton. When one combines not only the higher production costs but also the trend of lower yields/ha (due to climate change, soil fatigue), then production costs per ton have risen and are rising even more,” the NEPG experts say.
If processors don't want to run the danger of having fewer hectares and fewer potatoes the following season, NEPG advisors say that the contract prices and conditions need to take these changes into account. Utilizing cost price indicators is one method for paying fair value (contract pricing) for potatoes. A variety of price indices (energy, fertilizers, machinery, equipment, contractor's tariffs, buildings, and storage devices) could be used to link future contract prices. A different perspective would be to begin examining farmer production costs and utilize those as a tool to create contracts.
