Potatoes market outlook

November 2019

Production

Prospects for the 2019 potato crop were looking promising in the late summer after swift spring planting and a much more favourable growing season after the drought of 2018.

After such a hard season in 2018, and with a tight seed market, it was unsurprising that a lot of the industry was cautious with planting decisions. Planted area remained stable at 118,953 hectares a slight increase on the year, but still one of the lowest on record.

Normally at this time of year we’d use data from around 400 growers to calculate an estimate of yield and production. However, given the exceptional weather this autumn we’ve only had half of the forms in at this point.

Bearing that in mind, early figures suggest a production level of around 5.1Mt. This is based on an average yield of close to 45 tonnes a hectare, and takes into account losses of just over 3%.

However, our lifting report estimated that there was still 11% of the crop left in the ground by 12 November. How much of this will come out of the ground is uncertain and it is likely that we will see an increase in the area lost.

If we see crop losses closer to 10% then it is expected that the production figure will move lower to 4.8Mt. Compared to the same time last year we had a production level of 4.918Mt.

Trade

With much of the crop so wet at harvest it’s not just going to be a question of tonnage produced. There are also concerns about how well the crop will store, particularly managing rots.

To preserve the crop careful store management will be critical. We were already seeing higher levels of wastage before the rainfall and this is likely to increase as the season progresses.

We are likely to see processors hit the hardest. The North of England and Yorkshire accounts for 30% of all processing areas.  These regions have experienced much more adverse weather. And there has been reports of fry colour issues and rots in later lifted samples.

Issues with processing material may support the chipping market. With chippies demanding best quality frying supplies, Processors could help to mop up the average to low quality supplies.

This season we’ve seen the proportion of packing area grown on contract increase to nearly 70%. After such challenging conditions in 2018, many packers turned to contracts this season to manage supplies. This increase in contracted area means that there will be reduced free-buy requirements.

With better lifting conditions in Scotland and even higher contract coverage than England, we are likely to see a lot of Scottish material move south of the boarder. This is likely to cap free buy packing prices. The Scottish material is also likely to store better as it was lifted in better conditions.

Potatoes consumption trends

Fresh potato sales declined in volume over the year to 6 October 2019, according to Kantar, down 1.8% compared with the previous year. Sales of new and baking potatoes increased (+0.6% and +9.2%, respectively) though this was not enough to offset losses in maincrop potatoes, which make up 58% of fresh potato sales by volume.

Potatoes often feature in traditional meals such as roasts, casseroles and shepherd’s pie that are in decline, as we increasingly seek foods from abroad. There has been a decline in total number of roast dinners eaten, but, where they have been eaten, fresh potatoes have been featuring more often at occasions over the past year.

Dish types in growth include Italian, Oriental and Mexican, which don’t feature potatoes as heavily. On average, meals containing potatoes take nearly twice as long to prepare as those that don’t. This has contributed towards a decline in sales due to increasingly busier lifestyles and a need to save time on cooking.

Frozen potato products have continued to perform strongly. However, chilled potatoes and crisps have struggled. For chilled potatoes (e.g. prepared mash), volume declines have been driven by a smaller share of households buying into the category, while declines in crisps are driven by shoppers buying less frequently. Crisps are facing increasing competition from other snacking products including popcorn, tortilla chips and rice snacks.

What next?

  • Consumers are beginning to return to recessionary behaviours, which may continue to benefit baking potatoes, perceived as a filling and economic meal option
  • Snacking products may also benefit as consumers tend to look for treats and comfort during times of economic uncertainty
  • Fresh potatoes are likely to face continued pressures as consumers seek convenient, easy-to-cook meals and increasingly gain meal inspiration from far-flung places around the world.

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Potatoes: At A Glance

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Gallery: Potatoes at a glance

Click on the thumbnail images below for simple visual explanations as to how the potatoes market has performed, according to the latest data. Here we look at GB and international prices, consumption, production and trade figures.