Potato sector faces increasing costs despite sharp fall in yields

Bidwells consultant Neil Cameron presented new data to the ADAS/Syngenta UK Potatoes Conference showing that just although yields have dropped sharply this season, most costs have continued to rise.

"We have seen significant cost increases over the last six years, both per tonne and per hectare - though with yields down this year, cost per tonne is up further," he said.

A newly released Potato Council fact sheet puts variable costs in 2012 at 13 per cent higher than in 2011, "primarily due to increased fungicide usage due to very difficult growing conditions", it states.

Cameron explained that not all costs are up. "Fertiliser is getting a little cheaper, thanks partly to higher urea productions, thanks partly to farmers simply buying less," he pointed out.

"But motor fuel costs have doubled over the last ten years and electricity costs for storage have risen too. New machinery has also got much more expensive. Meanwhile, the relative price rise for oilseed rape and wheat have far outstripped that of potatoes, which have a hugely greater capital investment."

On the other hand, current free-market prices are "phenomenal - we haven't seen the like in many years", he added. This is one factor that suggests the planted area might not necessarily go down next year.

Cameron also urged growers to apply careful cost analysis to their own operations. "You need to understand your own costs and work out from those your cost per tonne. That means sold yield, which is not the same as what comes off the field, and benchmarking against others shows where you have room for improvement."


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