Market Report 12.10.22
Demand and consumption are improving as colder weather approaches. Sales of larger 7.5kg bags are down, with more volumes going through smaller pack sizes since the pandemic. More growers are harvesting where crops are fit. Quality is reported to be very good and yields are reduced on last year. With reduced planted acreage and yields this year stocks should tighten later in the year. Storage costs of crops over the winter is grower’s main concern. Growers must be compensated for these additional costs and additional margin passed directly to growers immediately.
In the U.K. lifting conditions are generally very good now and clearance of packing sector crops from the Midlands southwards is “down to the last week” with many now finished. Up the East side to Yorkshire, conditions remain dry with irrigation often required to reduce damage and 15 to 25mm is still being applied. In the Fens, where there is a high percentage of late frying varieties, some growers have not yet started but overall clearance is “around 50%”. In Scotland, rain prevented lifting at the start of the week but there is now good progress. Clearance is “around 25%”.
Clearance across Northern Europe has moved on well this week following the heavy rain in some areas two week ago and the estimate of total clearance in France is now 60%+. Buyers for the processing factories continue to focus on contracts and are showing little interest in free buy. Factories are at full production while there are ample supplies of quality raw material but there are also concerns about the future cost of electricity and the supply of gas. Some processors are encouraging growers by letter to remind them that their contract commitments must be honoured in full
Temporary Business Energy Support Scheme (TBESS)
The Temporary Business Energy Support Scheme (TBESS) will provide qualifying farms/businesses with up to 40% of the increase in electricity or gas bills, up to €10,000 per month and will be administered by the Revenue Commissioners. Subject to State Aid approval, once legislated for, it is expected that the scheme will be backdated to September 2022 and will run until February of next year. The scheme will be operated on a self-assessment basis. It is aimed at farms/businesses whose average unit gas or electricity price has risen by over 50% compared with their average unit gas or electricity price in 2021. The credit will be calculated as 40% of the excess of the 2022 bill over the 2021 bill, capped at €10,000 per trade per month.
Activity since last Council
- National Potato Day took place on Friday October 7th. This year’s National Potato Day focused on highlighting to consumers the value for money that potatoes offer to feed family and friends and Irish chipping potatoes.
- IFA met with DAFM in Backweston on Thursday September 16th to discuss the sustainable Use Directive. IFA will be making a detailed submission on the SUD when the national consultation opens.
- Budget 2023- following extensive lobbying it was announced that the Horticulture budget will increase to €10 million with support continuing under Brexit Adjustment for the Mushroom and Seed Potato sectors.
- An online meeting for all potato growers was held on Tuesday the 6th of September ahead of the commencement of the new season. The general consensus was that yields will be significantly reduced around the country due to drought and growing conditions this year. Shay Phelan from Teagasc also attended the meeting.
- A Potato Committee meeting took place on Tuesday August 30th in the Irish Farm Centre. Agenda items included 2022 markets, retail engagement, input costs, diquat derogation and the potato promotion.
- Following a lengthy campaign and lobby, an emergency use derogation for diquat was granted on September 16th.
- Approximately 1800 litres are authorised for use, based on the estimated emergency/essential need.
- Any product not used must be returned to the supplier who should then return it to their supplier (back to Syngenta).
- The emergency use was authorised in response to issues surrounding late planted crops in the north west and north east but is not exclusive to those areas.
- Maximum application rate 0.75 L/ha.
- IFA continues a campaign to highlight the impact of spiralling input costs on potato growers.
- The EU Potato Promotion activation for 2022 is under way. This is the final year of the successful campaign targeting millennial consumption. Growers are reminded to contribute to this very worthwhile campaign, which is 80% funded from the EU.
- IFA attended a potato promotion meeting with all industry stakeholders to discuss planned activities for the remainder of the year.
- IFA continues to highlight key issues identified in the report commissioned by economist Jim Power – Retail Price Compression Threatens the Viability of Irish Horticulture. The report calls for Government to move quickly to restore the ban on below-cost selling of food. Potatoes are detailed in the report and the full report can be found here.
- IFA continues to engage with all retailers and packers to convey growers increased input costs and issues around excessive tare levels.
- IFA continues to engage with retailers on spiralling input costs and setting up meetings with retailer buyers and packers at this critical period.
- IFA will continue to demand that packers and retailers pay sustainable potato farm gate prices.
- IFA will continue to contact growers to ensure they are aware of the costs of production and engage in stocks/acreage surveys.
- The 2022 European Potato Promotion is now underway and performing very well. Growers have received a letter to support this initiative and the potato committee are continuing to encourage growers to support the campaign.
- The National Potato Conference organised by IFA and Teagasc in conjunction with Bord Bia will take place on November 22nd in the City North Hotel this year. Further details will be communicated to growers shortly.
- A Copa Cogeca working party meeting on Potato and ad-hoc Starch will take place this month.