GB Potatoes: The GB potato industry
Find out about all of the key industry information from planted area to storage intentions. Scroll down to additional information section for further dashboards and commentary.
About our industry
The number of potato growers remains in decline, down to a low of c.1,667 in 2019. However, the area has remained relatively stable. The trend of industry consolidation continues, with an increase in medium to large enterprises and fewer small-scale growers.
The need for irrigation, specialist kit and loss of chemicals are all putting pressure on businesses. As cost of production is likely to have increased in recent years, together with price volatility, growing potatoes isn’t always an economically viable option for smaller scale operations.
The proportion of potatoes grown on contract (for pre-pack and processing) has been steadily increasing. Packers and processors are contracting more to ensure continuation of supply and limit price rises in increasingly volatile times. At the same time, growers are at the mercy of more frequent extremes in weather, so it’s unsurprising that businesses are keen to secure contracts to help mitigate risk and reduce price volatility along the supply chain.
While selling on the free-buy market historically could have been lucrative, the increasing risk means this market is losing its appeal for many in the industry. For most sectors, this trend seems likely to continue.
While the proportion of growers with access to irrigation has been in decline, the extreme dry conditions last season forced more growers to install irrigation equipment. Just over half of growers, 54%, now have access to irrigation. While an exceptional season, in 2018 there was a marked difference in yields and quality amongst those growers with access to irrigation and those without. As climate change is causing more frequent extreme weather events, agriculture will need to find ways to manage heatwaves, droughts and floods.
Growing organic potatoes remains extremely specialist, with less than 1% of the total potato area. Since 2012, this sector has been in decline. However, 2019 saw a jump in area and number of growers. This is reflected in retail sales of organic potatoes which have increased by 11% year on year. Most of this growth has come from discounters Aldi and Lidl increasing their ranges.
The proportion of area grown to early potatoes fell in 2019, from c.12% of the planted area, to c8%. This possibly reflects the particularly challenging conditions facing growers in 2018, with many early growers impacted by both extreme planting and growing conditions.
After a year of lower production, moving into 2019 stocks were tight. This supported prices until the end of the season, with average free-buy prices reaching a high of £240/t in June 2019. While availability was reduced, the market did not suffer as much as some had feared.
For some sectors, such as pre-pack, purchasers were able to use carryover stocks from 2017/18 well into 2018/19. Careful management of supplies, reducing promotions and relaxing of specifications where possible, mitigated some of the impact of a lower production year. As a result, free-buy prices did not end the season as high as some had anticipated.
The exception to this was for bagged chipping, which struggled with supply towards the end of the season. With suitable frying loads in short supply, free-buy chipping prices increased, with best quality Agria reaching a high of £500/t. Chippies cut portion sizes to reduce the amount of potatoes they needed to buy.
The early crop was lifted largely uninterrupted and increasing volumes entered the market to a pretty limited demand. As a result, we saw new season prices rapidly fall. While the price spread narrowed over the course of 2018/19, the average free-buy price tracked above the overall average price (including both free-buy and contract volumes) throughout, supported by the lower supply. Then as new crop volumes started moving, the average free-buy price was quick to fall below the overall average price.
With the new season well underway, free-buy prices appear to be creeping upwards. This follows a typical seasonal trend as supply moves into stores, but also reflects poor weather interrupting lifting. While production this season is unlikely to be low, such poor conditions at harvest raises questions on the actual amount of useable supply.
As crop is going into store wet, careful store management will be key and there is the potential for storage issues as the season progresses. There will also be some crop which has been unable to While too early to say for sure, there may well be significantly less useable crop available, which is likely to support prices for the season ahead.
The total planted area remains in decline. While at 118.95Kha, the 2019 planted area is up marginally on the previous year, it remains one of the lowest on record. Much of the increase seen in this year’s area has been from small growers, a decision likely driven in part by the high-priced year of 2018. We know that generally a season of high prices incentivises planting for some growers, and we would expect to see an increased area. The opposite of this is also true. Read more about the relationship between price and planting decisions here https://potatoes.ahdb.org.uk/publications/how-price-affects-planting-decisions
The top ten most widely grown varieties account for over 40% of the overall GB planted potato area. Maris Piper remains the dominant variety, making up 13.4% of the total potato area. The Piper area was generally in decline, but this year it has increased 5%. There has been an increase in the amount of Piper grown on contract. This is likely to be the result of the very dry start to the season. Purchasers were cautious and managed the risk of another high priced year for high value varieties by contracting more of their required volume.
The shift to newer varieties continues. Maris Peer, for example, has lost area to newer varieties such as Jazzy and the crisper Lady Rosetta has been overtaken by Taurus as the most popular crisping variety.
Most sectors have seen some growth in planted area compared to last year. The area of potatoes grown intended for the retail market remains the largest and has grown by 0.6Kha year-on-year, and 0.9Kha against the 5-year average. Potatoes grown for processing remains the second largest sector, with a slight increase in area, up 1% to 37.1Kha. While the area planted with potatoes intended for the fresh chipping sector has been following a generally downwards trend since 2010, although some years have seen a slight uptick year-on-year. This is the case this year, with a 4% rise in area at 13.5Kha, compared to last year.
The exceptionally wet harvest conditions have held up lifting across the country. As of week-ending 22 October, 70% of the GB potato area (excluding seed) was estimated to have been lifted. Yields are reported as average but there is huge variability.
Quality has been variable over the lifting period. The main issues have arisen from crops in standing water or have been challenging to lift and there is crop left in the ground. Above average levels of black leg and associated rots are reported on particularly saturated soils.
Concerns over storage issues are prevalent across all regions. Higher soil loading on crops going into store is slowing the drying process and reducing airflow through the crops. There are also increasing reports of rots in lifted crops, which combined with wet crops going into store increase the risk of rots spreading.
Our new lifting report and dashboards have more detail about harvest progress and conditions by region and market sector. https://ahdb.org.uk/potato-lifting-progress
Look out for our production estimate at BP 2019.
Our first estimate of stocks at the end of November that are held in growers’ stores will be published in January.