Cost of Consumption Potatoes Continues to Rise Due to Climate Change

The Consumption Potatoes Working Group (WCA) of the Dutch Agricultural Union (NAV) has made an estimate of the cost price for the upcoming season (2025). In recent years (harvests of 2022, 2023, and 2024), potato growers have already faced a significant increase in costs. The WCA calculates that these costs will further increase for the upcoming season. Climate change is beginning to take its toll, resulting in noticeably lower average yields over the past five years.

Therefore, the WCA has decided to reduce the yields in the calculation by 1.5 tons/ha. Contract prices have risen sharply in recent years, but the calculation for 2025 shows that the industry must once again increase prices to keep pace with the cost price for growers. For example, the WCA's calculations show 23.2 cents/kg (USD 0.29) for clay soil deliveries from the field and 29.4 cents/kg (USD 0.37) for deliveries from storage in week 12.

For sandy soil, this is 19.0 cents/kg (USD 0.24) and 24.4 cents/kg (USD 0.31), respectively. Storage costs have also risen significantly, from approximately EUR 1100/ha (USD 1460/ha) for the 2019 harvest to nearly EUR 2000/ha (USD 2650/ha) for 2025. 

Decreasing Yields

Since 2010, the WCA has been calculating the cost price of consumption potatoes for a model farm on sandy soil and clay soil each year. These calculations are always performed in the same way, ensuring good comparability over the years. For the cost price estimate for the 2025 harvest, the WCA has decided to account for the slightly declining yields of recent years by lowering the yields used in the calculations by 1.5 tons/ha across the board. The impact of climate change and the associated more extreme weather conditions are becoming apparent. 

The Calculations

The cost price is calculated excluding VAT and excluding the costs of irrigation. The WCA calculates EUR 270/ha (USD 360/ha) per irrigation application, with a 25 mm water application. Cultivation and storage costs have already increased significantly in recent seasons, and the WCA observes that this cost increase will continue in the coming season.

The costs of seed potatoes, crop protection, labor, land, and energy for storage are rising sharply. The costs for fertilizers and sprout inhibition are lower than last year, and other revenues (manure) are increasing compared to 2024. Ultimately, this results in a cost price that is 1.1 to 1.6 cents (USD 0.014 to 0.021) higher than that of last season.

From Cost Price to Desired Yield Price

The WCA always calculates a margin of 15% on the bare cost price to account for the risk the farmer takes to arrive at the desired yield price. Due to increasingly extreme weather and the loss of many essential crop protection products, this margin is more than necessary to continue growing potatoes in the future. For 2025, the desired yield price (cost price including margin) for field delivery of French fries potatoes on sandy soil is 19.0 cents/kg (USD 0.25) and on clay soil for field delivery is 23.2 cents/kg (USD 0.31).

For delivery from storage, the desired price on sandy soil is 24.4 cents/kg (USD 0.32) and for clay soil is 29.4 cents/kg (USD 0.39). It is important to note that the irrigation costs are not included in these calculated cost prices. In the current climate, it is almost necessary to irrigate twice a year, which increases the cost price by another 1 cent/kg (USD 0.013). 

Conclusion

The first indications are that the French fries industry will only minimally adjust contract prices. The POC's Contract Tool indicates that the average contract price for the 2024 harvest in week 12 is approximately 26.5 cents/kg (USD 0.35). The WCA calculations show that this is not sufficient for many growers. Although not many contract prices are known yet, an additional 2 to 3 cents (USD 0.026 to 0.039) will be needed compared to the 2024 harvest to make cultivation cost-effective for growers. The attractiveness of contracting French fries potatoes for growers will depend heavily on the further conditions. 

Cost Price of Table Potatoes

Last year, the WCA also examined the difference in cost price between French fries potatoes and table potatoes. The conclusion was that the cost price of table potatoes, given the same yield, is at least 2.5 to 3 cents/kg (USD 0.033 to 0.039) higher. Because yields and quality requirements vary greatly, it is necessary to calculate the cost price for table potatoes based on the specific situation. Since the financial consequences of not meeting the required quality can be significant, the 15% risk margin is certainly needed for table potatoes. 

NV Areas 

In the cultivation year 2025, many growers will face a nitrogen reduction because they are in a so-called Nutrient Polluted Area. This means that the nitrogen application for consumption potatoes will be 25% lower than in 2023. It is clear that this will affect the yield, but exactly how is not yet known. Therefore, the WCA has decided not to include the effects for 2025 in the current calculations. If these effects become clearer during the year, they will certainly be included in the calculation for 2026.