Potato growers face wipeout over retail pricing and surge in supply
At meetings in recent days, retailers and merchants were challenged by potato growers to return a viable farmgate price. The IFA is to hold an emergency meeting of all potato growers early in the new year to discuss this issue.
Mr Carpenter said: “Prices to producers are at historical lows and running well below the cost of production on all potatoes sold. Retailers and merchants must return a viable price that delivers a margin, if growers are to remain in business.”
After a season of over-production in 2010, which resulted in the export of close to 70,000 tonnes of potatoes, Irish potato growers made a conscious business decision to reduce the national planted acreage by up to 13%.
After a favourable growing season and higher than normal yields created a short-term over-supply, Irish potato production was back by an estimated 60,000 tonnes, which would suggest the market was more in balance than in oversupply.
Mr Carpenter said: “Below-cost selling of potatoes is not a sustainable practice as it leads to reduced prices to the producer in most cases.
“Large retail multiples sell up to 60% of fresh potatoes grown in Ireland and, therefore, have significant control in this sector.
“Retailers, as key stakeholders in the food supply chain, have a responsibility to their growers and to the future of the industry in this country. The increase in energy and fuel costs is adding to the income pressure on farmers.”
Meanwhile, a report by the Northwestern European Potato Growers (NEPG) found that the total harvest of the region’s five most important potato-producing countries reached 26.6m tons this year, 11.4% more than last year and above the 10-year average. This is mainly the result of higher yields per hectare and a small increase in area.
Growers in Northwestern Europe are generally experiencing low prices due to oversupply. However, the NEPG has identified possible sales opportunities for its members. It noted that the 2011/2012 season may well last a month longer because of the early start. It predicted a good demand for ready product within the food processing sector, including chip production. This demand was strongest outside of the EU, the NEPG said.
