Dutch farmers organisation (NAV): Contract prices for potatoes must increase by 10 percent

The Dutch Arable Farming Union has again calculated the expected cost price of consumption potatoes for the coming season. The cost shows a slight increase compared to expected cost price for the 2023 harvest.

The comparison of the desired yield price for the grower with the contract prices of French fries potatoes for the 2023 harvest shows that the contract prices for the 2024 harvest must rise by at least 2.5 to 3 cents to cover costs for the grower.

The NAV Working Group on Consumption Potatoes (WCA) has been carrying out these cost price calculations in the same way every year since 2010. This method calculates an average cost price for companies who grow ware potatoes on clay and for companies on sandy soil.

Two delivery times are included: off the field in September and out of the shed at the end of March/beginning of April. In the calculation for the 2024 harvest, a number of cost items have increased (labor, land costs and crop protection) and a number have decreased (fertilizers, electricity and fuel).

The end result is that the expected cost price for the 2024 harvest is at a slightly higher level than that of the 2023 season. For clay soil, the cost price ex VAT at field level is 18.8 cents/kg and for delivery from the shed at 24.2 cents/kg. For sandy soil, the cost price excl VAT delivered directly from the field is 15.5 cents/kg and for delivery from the shed it is 20.2 cents/kg.

Risk premium of 15%

The NAV always charges a premium of 15% on top of the basic cost price for the risk that the grower takes to achieve the desired yield price for the grower in order to continue growing potatoes in the future.

The experience of the 2023 season shows that this risk premium on the basic cost price is essential. And this will only become more important in the future due to more extreme weather and the disappearance of crop protection products. This brings the desired yield price for the grower for field delivery on clay soil ex VAT to 21.6 cents/kg and for delivery from the barn ex VAT to 27.8 cents/kg. For sand, this is 17.8 cents/kg for land delivery ex VAT and 23.3 cents/kg for delivery from the barn ex VAT.

Contract prices for 2024 must increase 10%

The Producers' Organization for Consumption Potatoes has developed a Contract Tool with which contract prices from different buyers can be compared.

This shows that for the 2023 harvest, the average contract price for delivery at the end of September across the various varieties was an average of 18.5 cents/kg and for delivery at the end of March at 24.5 cents/kg. They therefore see that the contract prices for the 2024 harvest will certainly have to increase by another 2 to 3 cents (approx. 10%) to make the cultivation cost-covering and future-proof for the grower.