by Gus Trompiz and Sybille de La Hamaide
PARIS (Reuters) – This summer’s drought and record heat in Europe could lead to the worst potato harvest in years, with the risk of higher costs for French fries for consumers and a further increase in costs for producers.
The very unfavorable weather conditions of recent months in Germany, France, the Netherlands and Belgium, four countries which provide the majority of potato production in the European Union, could bring production volumes below the lowest lows of 2018, a year already marked by an unusual drought, according to analysts at World Potato Markets.
The EU’s crop monitoring service this week cut its yield forecast by 2.5%, even though the forecast matches the average of the past five years.
Some producers warn about the reliability of the estimates, explaining that most of the harvest takes place in September and that the showers and the drop in temperatures since mid-August could improve the situation. But in the fields, hope is tenuous.
In Juliers, in the German Land of North Rhine-Westphalia, Erich Gussen thus estimates that his harvest could be reduced by half and that the rain comes too late.
“The harvest only takes place in September-October but it is clear that nothing is still growing here,” he says.
In the best-equipped farms, irrigating the fields helped to limit the impact of the drought, but the plants suffered from successive heat waves.
“As much water stress as we can manage, as much heat stress, we can’t do anything about it. We have experienced episodes of heat but there, in terms of peaks and length, we have not experienced”, explains Geoffroy d ‘Evry, farmer in Oise and president of the National Union of Potato Producers (UNPT).
In France, yields could be at least 20% lower than their average for the past 20 years, according to the latest UNPT estimates based on samples. The federation now speaks of a “catastrophic” harvest.
Heat is a risk for yields as well as quality, with excessive temperatures affecting both the shape and color of the tubers, which may complicate their processing, with supply contracts including criteria such as the length of fries.
UPWARDS PRICES HAVE ALREADY JUMPED BY 50%
After the increase in production costs linked to the rise in the prices of energy and other raw materials, a disappointing harvest could however lead producers to raise their selling prices.
“It will cost more for the sector, more for the consumer, but the greatest cost will be borne by the farmers”, estimates Christophe Vermeulen, managing director of Belgapom, the Belgian federation of the sector, who estimates that the fall in the national harvest could reach 30%.
Pascal Willaert, co-manager of Maison Antoine, one of the most famous chip shops in Brussels, expects the scarcity of the raw material to drive up prices.
“It’s too early to say by how much, but what is certain is that we are not going to go cheaper,” he said, adding that his barracks have already raised their prices by around 10% since the beginning of the year to pass on rising energy costs.
Large multinationals such as McDonald’s have also revised their price list upwards, among others for fries, in order to integrate the increase in the price of raw materials.
Neither McDonald’s nor McCain Foods, a major European producer of frozen fries for both McDonald’s and its own brands, were immediately available to discuss the possible impact of the harvest in Europe.
In the EEX market, the most traded European potato futures contract, for delivery in April 2023, is up almost 50% since the start of the year.
The experience of 2018 shows that growers and industrialists will have to adapt, believes Bernard Ouillon, general delegate of GIPT, the interprofessional group for the development of potatoes, recalling that four years ago, the renegotiation of certain contracts had authorized a reduction in the size of the fries.
But he considers it unlikely that a rise in selling prices will dampen final demand.
“A kilo of frozen fries is less than 2 euros, we are on economical products. It is rarely a brake on the purchase”, he says.
Up the supply chain, however, growers and processors may struggle to source.
“We will find what we can on the European market. We will scrape all the bottoms of the drawer”, predicts Geoffroy d’Evry.
(Report Gus Trompiz in Paris, Sybille de La Hamaide and Clément Rossignol in Brussels, Erol Dogrudogan in Juliers, Michael Hogan in Hamburg, Nigel Hunt in London and Marek Strzelecki in Warsaw, French version Marc Angrand, edited by Kate Entringer)