Luxembourg: The consequences of potato overproduction

In Western European fields, potatoes have grown particularly well this year thanks to the weather. This is also the case in Luxembourg. "The sun shone when it needed to and it rained when it needed to," confirms Nathalie Lamberty, director of the potato seed cooperative Synplants.

That’s why this year there are potatoes "like sand at the sea". However, there is a problem: the demand for potatoes is not as high as the current supply.

The situation on the open market is therefore currently difficult: a ton of potatoes currently fetches only a few euros, while each kilogram of potatoes has a production cost of 20 to 25 cents, as Luxembourg farmer Marc Nicolay explains. Added to this are other costs, for example, for packaging.

The message conveyed by the media doesn’t necessarily do justice to the situation, argues Marc Nicolay, referring to the "sometimes sensationalist headlines." Indeed, the initial situation is complex in itself.

55,000 hectares more than last year

So, it wasn’t just the good weather that contributed to this year’s abundant potato harvest: "In Western Europe, including Poland, 55,000 more hectares of potatoes were cultivated this year than last," explains Nathalie Lamberty. The reason: in recent years, potato harvests have been less plentiful, so, as Nathalie Lamberty clearly explains, "last year, French fry factories bought every kilo they could find at a good price."

Thanks to customers buying local products, the Luxembourg regional market is largely unaffected, explains Marc Nicolay.  © PHOTO: John Lamberty/Archives LW

This is why it was primarily industrial potatoes, used for products like potato chips and French fries, that were cultivated in the largest quantities. However, European French fry factories faced competition on the international market, particularly from India and China. Therefore, while the supply of potatoes increased, demand from factories stagnated or even decreased.

On the open market, potatoes currently have little value. Even good quality industrial potatoes are currently priced at only 55 euros per ton, according to Nathalie Lamberty. "For potatoes intended for consumption, it’s perhaps 80 euros."

However, many Luxembourg farmers reportedly signed contracts and were therefore able to sell their potatoes at reasonable prices. This was also the case for Marc Nicolay. He himself experienced relatively few problems, he says. "I sold 95% of my harvest in one form or another through contracts."

Here is the situation in Luxembourg

“It’s important to understand that in the potato market, we work extensively with contracts,” explains Marc Nicolay. Therefore, just because prices are low on the open market doesn’t automatically mean that prices for consumers will fall. This is because farmers have already finalized their delivery contracts—at a fair price—between last December and February of this year for the planting season starting in April, he explains.

"It’s better to use potatoes than to let them rot."

Furthermore, no farmers in Luxembourg produce potatoes for industrial purposes on a large scale, and these are the main crops affected by the decline in demand from French fry factories. This is why Luxembourg has been largely spared the negative consequences, according to Marc Nicolay. "The regional market we have here is largely unaffected by this phenomenon."

“What’s currently being discussed are the surplus quantities. Even at zero, they’re not finding buyers this year,” the farmer explains, referring to the surplus due to weather conditions. These surpluses are also difficult to sell, according to Marc Nicolay. That’s why good-quality potatoes are currently being used as feedstock for biogas plants or as animal feed.

Farmers make no profit from these tubers. "But if there is no market for potatoes, it is better to use them this way rather than let them rot in a corner," notes Marc Nicolay.

And what are the farmer’s price forecasts for next year? "For potatoes, August 1st is a clean slate from one year to the next," he says. "Anything that hasn’t been processed by mid-August doesn’t find a buyer, because the new harvests are already arriving at that time." He doesn’t think the industry can afford to drastically lower prices now. After all, it would have to be possible to guarantee farmers a production that covers their costs.

This article was originally published on the Luxemburger Wort website . It was translated using artificial intelligence tools that learn from data from human translations, and then checked by Lorène Paul.