A heat wave in Europe is projected to bring potato crops to their lowest level in years, threatening to push prices of popular foods such as potato chips even higher as consumers grapple with rising inflation.

Potatoes, a staple in households, whether purchased raw or as cooked foods such as chips and chips, have hit record temperatures and Europe’s worst drought in 500 years this year. It is one of the most popular summer crops.

Dry conditions in Germany, France, the Netherlands and Belgium – the northwestern belt that accounts for most of the European Union’s potato production – have pushed EU production to record lows, according to World Potato Market analysts. It is possible that they will be pushed up.

2018 was a disaster

Higher energy and food prices fueled inflation, pushing him up to 9% in the Eurozone. This is the lowest level in half a century.

European growers warn that harvest forecasts are preliminary ahead of September’s main harvest, and showers and recent cooler temperatures may ease the delay. But there is little hope for some farms.

In Jürich in western Germany, Erich Gussen says up to half of the crop could be lost due to drought, and the rains will now come too late. ‘ he said, examining the shriveled ground.

Germany’s agriculture ministry did not provide a harvest forecast in its Aug. 26 harvest report, but said the prospects for the potato harvest “have deteriorated significantly.” The EU Crop Monitoring Service cut its monthly potato yield forecast by 2.5% this week, even though the revised forecast was in line with the average for the past five years.

France could be hit hard. Harvests could be at least 20-20% below his 20-year average, based on the latest field research, according to French grower group UNPT.

Irrigation mitigated the effects of drought on well-equipped farms, but crops died in successive heat waves.

Geoffroy d’Evry, a grower north of Paris and head of the UNPT, said: “It can handle water stress, but not heat stress. “We’ve had heat waves before, but we’ve never seen a spike in temperature and how long it lasted.”

High temperatures are considered a yield and quality risk, as they change the shape and color of the tubers.

This can be a headache for potato processing where standards such as French fries are contracted. “It will cost more for the industry and more for the consumer”.

Pascal Willert, co-owner of Maison Antoine, one of Brussels’ most famous stalls selling the famous Belgian French fries, said the declining availability of high-quality potatoes has pushed prices down. He said it is likely to rise further.

“It’s too early to say how much, but what’s certain is that we’re not moving toward lower prices,” he said.

His business has already raised prices by about 10% this year due to energy costs that can affect the cost of making French fries more than the price of potatoes.

Foodservice under pressure

International food companies such as McDonald’s have also raised prices this year in response to rising commodity prices, with potato chip prices rising in the UK this summer.

Neither McDonald’s nor McCain Foods, the leading manufacturer of frozen French fries in Europe for McDonald’s and its retail brands, responded to requests for comment on the potential impact of the European crop. French farmers had to renegotiate contracts with buyers like McCain in 2018 and shorten their fries after this year’s drought. Bernard Ouillon, executive director of GIPT, the French potato sector organization, said similar problems could arise this year.

On the EEX exchange, the most active European potato futures for delivery in April 2023 is up nearly 50% so far this year after hitting contract volume in early August.

Rising retail prices are unlikely to undermine demand for affordable staples such as frozen French fries, despite the inflationary burden on households, Ouillon added.

In Brussels, Maison Helain Helain Schoonjans, a client of Antoine’s IT services, a worker, says Helain Schoonjans probably wouldn’t hesitate given the prices of occasional dining out. But in the supply chain, farms and businesses may have to work harder to harvest, unlike two years ago when the coronavirus lockdowns left Nordic potato stocks piling up.

“People will try until the very end,” says d’Evry.

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Source: Reuters