'Costs increase - but potatoes remain affordable'


04 January 2023
German growers' association talks about its main early crop, and some of the challenges it is facing this year.

POTATOES are still a product everyone can afford, according to German growers' organisation, Palatinate Grumbeere, whose growers cultivate 4,000 hectares of early potatoes. 

The Pfälzer Grumbeere growers' association includes 265 farmers. In a recent interview with Fresh Plaza, the organisation's Chairman Hartmut Magin, its first deputy chairman Johannes Zehfuß and the second deputy chairman, Markus Frank spoke about the past and upcoming early potato season.

"From August 10th, we then no longer speak of early potatoes, but of table potatoes, which in turn cover around 2,000 hectares. On 1,300 to 1,500 hectares, processing potatoes are grown, which go to both the chips and french fries industry," Hartmut said.

The early potatoes from Pfälzer Grumbeere went into the normal market segment this year. "We were able to record good sales for this product. However, some products had to be discarded due to small skin defects. In part, this product, with concessions, could still be sold as peeled potatoes for large kitchens or the french fry industry," Harmut said.

Johannes said many in the industry were struggling because of the energy crisis. He said: "During the drought, a lot of irrigation was necessary. Crop volumes were at the normal average because we had enough water available. Therefore, we were able to offer the potatoes in sufficient quantities this year. The quality of the early potatoes could be guaranteed." 

The early potato is Pfälzer Grumbeere's main product.

The product usually enters the market at a high price. However, a price drop followed, due to the high costs of fertilization, transport and irrigation. "Inflation is rising, but labor costs have also increased by 22 percent. We farmers, of course, have to look at how we can still cover the costs. In addition, however, it must also be said that the price per kilo of potatoes just increased by in the 0.10 to 0.20 EUR. Potatoes are still a product that everyone can afford."

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Additional costs for this year's early and table potatoes could not be priced in. "Contrary to many media reports, there has been no increase in producer prices compared to last year, which is a major burden. If we cannot pass on the additional costs next year, some farms will have to give up. Sustainability is important, of course. But economic sustainability should also be ensured so that producers can make a living from it," Johannes said.

He does not expect any major changes in the cultivation planning for early potatoes in the coming year, but at the end of 2023 it will become clear who has managed well in view of the "exorbitant price increases" and who has not. However, there will be changes in varieties if retailers do not take into account the structures within the Palatinate, Frank said. 

"The 2021/2022 producer prices of the early potato season were almost identical to the previous season. At the POS, however, we then had price increases of 70-90 percent in some cases. On average, potatoes were sold for 1.50 EUR/kg, this year even well over 2.00 EUR/kg. In the end, producers ask themselves where the money goes. After all, we certainly didn't get to fill our pockets. We also had to contend with significantly higher production costs. The money was earned by someone else, who of course also apportioned their costs," says Frank.

There were no major crop losses in the early season. Zehfuß: "When the big heat came, the early potatoes were ready for harvest anyway. There was definitely a certain crop degression in the following and late varieties, but not due to a lack of water, as this is not a major problem in the Palatinate." In this regard, he points to the region's tried-and-true irrigation system, which has been in place for decades.

Markus said potatoes were also sourced from outlying regions such as southern Rheinhessen, neighboring areas in Hesse and Baden-Württemberg, or from the southern Palatinate. Harvests this year suffered because of the heat. Thanks to good irrigation technology, the Palatinate region is also no longer dependent on highly fluctuating harvest conditions, he said.

Production and operating costs were 30% higher this year, Johannes said. He expects they could be even higher next year. "Our costs will go up at least 50%. Whether we can shift that money around is questionable." Harmut also emphasised the necessary investments for tractors and harvesting machines and whether the machines ordered will arrive on time. 

"But potato prices remain in a range that is affordable for consumers," he concluded.

Source: Fresh Plaza   Photo: Pfälzer Grumbeere