Across Ireland and Europe, retail sales of potatoes have remained high, bucking the usual seasonal lull. As reported last month, when restrictions on movement were introduced, many growers recorded an increase in retail demand for potatoes.

This increased demand had been felt right across Europe, with reports of potatoes moving from countries such as France and Germany to help meet demand in eastern Europe.

Double-edged sword

However, this move proved to be a double-edged sword, as the widespread closure of restaurants and other food service outlets resulted in a fall in the demand for processed potato products.

This is being hardest felt on continental Europe, which has a significant potato processing industry.

According to the AHDB, this is being reflected in the April 2020 potato futures market, where contract prices fell by over €100/t since the start of March to close at €28/t at the end of the month. Prices have even fallen below the oversupply year of 2017/18.

Physical movement is now limited to contracts and free-buy sales are almost non-existent.

Closures

The loss of such a large market for processed products has led to many factories shutting down lines and scaling down production.

This is particularly the case for lines producing fresh chips and other products which are harder to store for any length of time.

Production is continuing for frozen products, for the time being, and retail sales of frozen products are expected to increase due to the public stocking up on non-perishable foodstuffs, the AHDB reports.

Some processors on the continent now intend to scale back early crop areas.

However, retail sales only make up a small proportion of total sales and even with a potential increase it will not offset losses.

Surplus material

As the big European processors scale back production, there remains a significant volume of processing potatoes within Europe which are unable to be sold into a market.

The lack of free-buy sales means that anything remaining which is surplus has limited options.

Equally, the current situation means that should processors run out of storage for frozen products, then they may be unable to utilise the full volume of contracted supplies.

This is a worry for European potato farmers. For example, in France alone, it is estimated that around half a million tonnes of processing potatoes could be left at the end of this season unable to be sold.

Impact

There is an attempt to utilise these volumes in starch production and anaerobic digestion, but, for some, the price paid is less than the cost of haulage.

The impact of this large surplus of processing potatoes across Europe is likely to have an impact on next season.

The AHDB reports that some processors on the continent intend to scale back early crop areas to allow for as much old crop to be processed as possible.