Plan for a profitable potato crop

cbd88acf-d4a8-42a1-b96e-d75f4f9f8091

Latest Posts
News
Global production down 6%
31 January 2023
Industry Updates
Why Farming Matters
31 January 2023
Industry Updates
App to digitalise potato crop performance
30 January 2023
Industry Updates
Breakfast with LEAF
30 January 2023
20 January 2023
|
Andrew Goodinson discusses the most important areas to assess when deciding on potato crop strategies for 2023. 

THE substantial jump in the price of inputs and inputs means growers need to think carefully how they manage the risks they are facing, how to best manage their cash flow – and the all-important profit margin, Andrew stresses.

“With the change in the cost to profit ratio, cashflow requirements may have changed, so growers need to know their gross margins and plan for the future, using a budget to determine how much will be made from the crop,” he said.

Looking at the current prices for crisping and processing sectors, Andrew suggests growers opt to move some area away from crisping to grow a processing variety instead because input costs are the same but yields are higher.

“For example, if a crisping crop does 38 to 40 tonnes a hectare on average, processing does 45 to 50 tonnes a hectare for the same cost.”

In addition, the seed rate for crisping variety is higher and the seed cost is also more expensive.

“As the cost of living crisis tightens, it is a good idea to understand exactly what both fixed and variable costs are for each part of your business, and the areas which are the most profitable.” 

In addition to costs going up, there are increasing pressures from retailers wanting not only to keep prices down but to reduce the carbon footprint. Some have signed up to becoming carbon neutral over the next 15 years or so.

“In the future, supermarkets are likely to be seeking more transparency and justification of input use, so the better information we have, the more visibility there will be for the supply chain,” said Andrew. “Moreover, the quality bar is being raised all the time.”

Land rent can be expensive, and he points out that in some areas, such as Herefordshire, there is pressure on demand for land for growing, pushing up prices.

In addition, if fields are rented, there can be a lot of costs before any variable costs are applied. For example, in Herefordshire, while some rents can be £750 /ha others are £2000/ha, so tough decisions may need to be made on whether to grow potatoes at all.

Nonetheless, well thought-out plans and strategies can help prepare for different scenarios that growers are likely to face in 2023. 

“It is important to regularly review your practices and don't just follow the same system every year,” he said. “Assessing what will make the most money not just in one season but over the whole rotation can help you decide on your focus and establish your rotation for the best overall margins.”

‘Assess the whole rotation’

As an example, in the Herefordshire area, Andrew believes a rotation such as wheat, potatoes, wheat, maize, wheat, broccoli could work well not only for profitability but also the diversity of crops can help to avoid pest build-up.

“We spend a lot of time analysing and talking about inputs and input costs, such as fertiliser fuel land seed and crop protection costs, but capital expenditure should also come under the spotlight, too. Doing the maths on whether you can justify buying or leasing machinery, or looking at the possibility of hiring it when you need it, can help you assess the costs and risks so you can work out what is the best way forward.”

Andrew notes that most providers are quite flexible about hiring machinery, so it would be unlikely to put the work window at risk in a difficult year.

Every field is different, and he recommends identifying marginal land to build understanding of which areas are making money and those that are not – and also to review the planted area as a proportion of the whole field.

When using their own land for growing, he recommends using technology such as Omnia which creates yield maps which show the parts of the field that have higher or lower productivity for the combinable crops in the rotation.

“While the results are not yet directly relevant to potatoes, it is worth keeping an eye on how other crops in the rotation do, as if fields do not yield well where combinable crops are grown, they are unlikely to produce good potato yields.”

“Carefully assessing the lie of the land will help evaluate the best way to plant the field – and building better understanding of how to optimise efficiency.”

Crops will have to work very hard this year to achieve good yields and necessary profit margins, so clever cultivations and nutrient strategies are called for.

He adds that another option for owned land that does not make money or is a high-risk cropping area, is to think of replacing the crop with a low-risk income, such as going into a CSS scheme However, as this would be difficult on rented land, one suggestion would be to plant a short-term environmental mix to provide predators and beneficials for potato pests.

Nutrients – are you applying the right amounts?

While it is generally accepted that understanding nutrients in the soil will help drive efficiency, Andrew advises growers to look hard at available phosphate levels and assess whether their nutrient strategy is really cost-effective.

“Using a 14:14:21 (NPK) compound  is a popular strategy for many potato growers, but when you analyse it against the crop needs, it contains more phosphate (P) than is needed to grow a potato crop,” he said.

For example, if soil is Index 3, it roughly needs only 50kg/P/ha, 220kg/N/ha, and 300kg-350kg/K/ha.

“This implies that you are paying for a compound with too high much P, and although there may be energy savings because it is applied in one pass, these can be quickly be made up in savings on fertiliser if you apply the appropriate nutrition to fit crop needs.”

He points out that technology tools such as Omnia can help growers by providing the option of using  variable fertiliser rates, so growers can use straights to the best effect.

“Another alternative is a tailor-made liquid blend which can be applied at planting, which has a particular advantage if conditions are very dry because it helps the crop uptake it. There is also a benefit in terms of the carbon footprint - as It is applied into the soil, it helps keep fertiliser in the ground and out of the air.”

The better the nutrition information from soils and  what the crop needs, the better the nutrient use efficiency and therefore help keep costs under control, Andrew stressed.

Although soil health remains key to the future, sometimes compromises may need to be made, particularly if the ground is rented.

“If you are renting, your priority has to be feeding the crop rather than improving the ground but this isn't ideal over a longer term and it is a good idea to discuss soil improvements with the landlord and to make a joined-up arrangement which takes proper measurement of soil indices and PCN levels.

Costs

Content continues after advertisements

There are some new single pass potato planters on the market that have the potential to reduce fuel costs because the tractor use will be lower.

“There are also some activities which you may find could be tweaked to help keep costs down; for example cultivation practises use a lot of fuel, so keeping these to a minimum can have a real impact.

“Costs of fuel are high. If you use a tractor, costs are likely to be around £50 per tractor per hour. If you take into account that excessive cultivations don't produce higher yields tuber size or improve quality, choosing to keep cultivations to a minimum and reduce their depth is a no-brainer.”

He adds that research has suggested that depths can reduce fuel usage by up to one third. 

Moving on to discuss the costs of irrigation, Andrew highlights that a proper assessment should balance the costs and benefits of irrigation, looking at quality and yield against energy used and water costs.

“Irrigation needs to be done when crop response is at its greatest – which is tuber initiation and tuber bulking.

“If soils are too dry, the seed potato will not throw as many daughters as it may be in survival mode, hence ensuring adequate water is available at this time is key to setting up a good crop.

“There is of course the theory that roots will grow down in response to dry soils to seek out and scavenge water and nutrients, but first of all they need the moisture to establish.”

Andrew goes on to note that trickle irrgation costs per ha are about the same as overhead gun irrigation costs, but set-up costs are slightly higher because the equipment has to be rolled out for use and then collected up again after harvest. However, on the plus side, trickle irrigation is more water efficient as uses about 30percent of the volume of overhead irrigation.

Where gun irrigation is used, increased fuel costs have increased the average cost to £130 per ha for fuel alone to work the pump, he adds, estimating that the typical total irrigation cost per ha for 125mm/season could be £600.

Irrigation is also key at tuber initiation for scab control.

The other key time is tuber bulking, which in maincrop varieties is from the third week of June until the second week of August.

“Many of the crops grown in 2022 really struggled at this time because temperatures were really hot, and so the crop transpiration rate was very high. As a result, many of the crops were really not we're really not receiving enough water they were just being teased with irrigation.”

He adds that where gun irrigators were used, much of the irrigation water evaporated before reaching the crop.

“It is a good idea to reconsider the benefits and costs of moving to trickle irrigation. It is kinder to the crop and there is no wastage or run off but managing it is an ongoing process and a continual operation.

“However, it is important to mention that the Environment Agency is looking to revoke licences where possible, so if you inform them you are going to move to trickle irrigation, they may cut down your licence water consumption allowance. “

Think local

Andrew recommends keeping current fuel costs in mind when making decisions on which fields to rent.

“If you rent ground 30 miles away, there will be implications of transporting inputs over longer distances, and also at lifting.

“But also think through how long you're going to spend on the road as you will have to travel to apply plant protection products search as blight sprays. Local traffic conditions can also mean trips take longer, particularly if there are traffic lights or the road goes close to a school.”

Seed potatoes

Seed potatoes are key to growing a successful crop, and maintaining maximum vigour after delivery should be top of the agenda for growers.

However, in many cases, it is almost an afterthought, he says, reflecting, they are still often treated as a commodity rather than a specialist input that needs attention to detail when it arrives on-farm.

“I have seen a number of examples where temperatures may have been very cold during transport but then the seeds are placed into warmer storage, which may cause condensation and also raise the potential incidence of early sprouting.

“When seed arrives, it should be carefully inspected to ensure that they meet the order specifications and quality requirements. Each bag should be sealed with the details of variety, grade and size on the label.”

The bags should be unloaded into clean boxes which have not been treated with sprout suppressant (especially old boxes which may have traces of CIPC), cured and placed into storage.

He adds that AHDB advice says that store temperature will normally need to be 3 deg.C, depending on the time the seed potatoes will be stored, and if this is less than five weeks, 4 deg.C  may be enough.

Storage – growers under pressure from energy and sprout suppressant costs

Getting any leaky stores fixed should be high on the agenda, Andrew says. Storing potatoes need 1 1/2 to 2 kilowatts per ton per week,  and energy tariffs could make or break profitability.

The recent energy price hikes have meant that those who have had to renew their tariffs paying much higher rates, leading to huge differences in storage costs.

“Metering every store is a good idea because it really helps you gauge what is happening.”

But it is not just energy costs that makes storage expensive, and since the withdrawal of CIPC, the currently available sprout suppressants (orange oil, spearmint oil, ethylene and DMN) are more expensive. As a result, many growers are becoming more judicious in their use and only applying them when they really need to.

“This year, profitability will depend on optimising efficiency and cost-effectiveness by making a number of small changes which add up.”