PotatoPro Newsletter

Services for the Potato Processing Industry

July 16, 2008

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Kiremko

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Dear Subscriber,

Potato farmers in Australia, supplying the French fry factories of Simplot will receive a 35% higher price for their potatoes.

For a while, it looked like the price increases of food crops would not dramatically affect the potato prices. In fact, some countries (India, Bangladesh) saw very low prices due to record harvests combined with limited storage and processing capacities.

But the dramatic price increase (35%) in Australia is a clear indication that potato prices will go up as well.

The causes are clear: higher costs of inputs such as fertilizer and energy. Furthermore, the potato has to compete with other crops that have seen huge price increases such as corn (34%), oil crops such as soybean (87%) and wheat (130%) [figures in brackets increase between march 2007 - march 2008, BBC]. A recent OECD report confirmed the biofuels as a contributing factor to the price increases of food crops. (More on biofuels and the position of the snack food industry in this previous PotatoPro newsletter)

The Australian potato farmers obviously made a successful case that without such a price increase growing potatoes would not be profitable for them and that there would be plenty of alternative crops that they could switch to that would make them more money.

Potato FieldAustralia is not the only place where lengthy negotiations are going on between Potato growers and Potato Processors: the same is true on Prince Edward Island (PEI) between Cavendish Farms and its potato farmers.

Keep in mind that  the agreed price increase is in Australia: these negotiations are for a crop that will only be planted starting September.

The potato farmers that are still stuck in lengthy negotiations with Cavendish Farms are not so lucky:  their potatoes are in the ground and growing, to be harvested in the fall. The price increase in Australia may strengthen PEI farmers’ hope for a higher price, but with less potato processing capacity anticipated on the Island (McCain will cut a shift at its PEI factory) both farmers and processors have a hard choice to make.

Enjoy reading,

Paul van Eijck

Featured Event

Organizing an event for the potato industry and your event is not yet included in our overview of events? Let us know...

Featured Market Research Report

 

Global Fruit & Vegetables

Datamonitor's Global Fruit & Vegetables industry profile is an essential resource for top-level data and analysis covering the Fruit & Vegetables industry. It includes data on market size and segmentation, plus textual analysis of the key trends and competitive landscape, demographic information, and descriptions of the leading companies.

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Featured Book

 

Handbook of Potato Production, Improvement, and Postharvest ManagementHandbook of Potato Production, Improvement, and Postharvest Management

Potatoes are a crucial food crop around the world, grown in nearly 150 countries. The Handbook of Potato Production, Improvement, and Postharvest Management compiles everything you need to know about potato crop production in one well-organized reference. Leading international authorities clearly discuss the biology, genetics, breeding, diseases, and effective approaches for improvement of crop and handling after harvest. This one-of-a-kind text explores, from interdisciplinary perspectives, every aspect of potato crop management from seed germination to end use while presenting the most current research available.

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Featured Product

Digital Balance for Weight in Water Assessment

Digital Balance for Weight in Water Assessment

  • Any weight of potatoes can be measured
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On the push of one button the PW-2050 weigher automatically calculates percentage dry matter and specific gravity of a potato sample. The PW-2050 can store up to 5000 individual weights in its memory and can down load data to a PC or printer. The time and date of each weighing is recorded and printed and will remain in the memory until cleared.

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More products

Featured Article

Two weeks ago we mentioned in this section a report from Deloitte: "Food and Beverage Industry 2012, the Dutch perspective". Today we want to point you to the "international" version of this report: "Food and Beverage 2012, A Taste of things to come". The central topic in this Deloitte report is entirely in line with the topic of this newsletter: how food companies have to adjust to higher prices...

 

News

French Fries and Potato Specialties

United Kingdom Potato Growers urged to quantify costs
Australia 35% price increase for potato farmers Simplot Australia
United States Work starts on burned Grandview potato plant
United Kingdom McCain Foods axes 46 jobs at Scarborough prepared foods plant
Canada McCain Foods to open its new Florenceville french fry facility next week
Canada Less potatoes planted in Manitoba in 2008
Switzerland Kadi AG gets new owners in management buyout.
More News on French Fries and Potato Specialties

Chips and Snacks

United Kingdom Potato Growers urged to quantify costs
United States Texas A&M AgriLife Research Helping Potato Chip Industry with Zebra Chip Disease
- PreventASe Xtru: DSM's tailormade solution for acrylamide reduction in Extruded snacks
United States Do Consumers Care that Frito-Lay's Sun Chips are Solar Powered? Apparently.
United Kingdom Walkers launches "Do Us a Flavour campaign"
United States Snack Alliance expands Hermiston plant
United Kingdom Las Pringles ni siquiera son patatas
More News on Chips and Snacks

Potato Starch

European Union Agrana ratings downgraded
Spain La patata llega a las bolsas biodegradables
More news on Potato Starch

Other Potato Products

United States These spuds are for LI vodka
More Other News

Ingredients for Potato Processing

- PreventASe Xtru: DSM's tailormade solution for acrylamide reduction in Extruded snacks
United States Valley Research Acquisition strengthens DSM enzyme activities
Malaysia Gain Report: Palm Oil Export from Malaysia (Jan-Mar 2008)
Ukraine Ukraine Oilseed and Products 2008
More News on Ingredients for Potato Processing

Processing Equipment

- Odenberg break through ‘Peeling Process Technology’ delivers Energy and Yield savings
More News on Processing Equipment

Potato Supply Chain

- 2009 findet 7. Welt-Kartoffel-Kongress statt
United Kingdom Potato Growers urged to quantify costs
Australia 35% price increase for potato farmers Simplot Australia
India Indian Cold storage owners support potato growers
- Tasmanian Institute of Agricultural Research developed a potato that is resistant to common scab
United States Texas A&M AgriLife Research Helping Potato Chip Industry with Zebra Chip Disease
United States North Dakota potato acres down 14%
Canada Less potatoes planted in Manitoba in 2008
Chile SAG implementa estricto control fitosanitario en el marco del Programa Nacional de la Papa
Venezuela Gain Report: Venezuela Potato Update 2008
More News on Potato Supply Chain

QSR Restaurants

United States Yum CEO David Novak takes on KFC's weak results
United States Californian Legislature approves bill banning trans fats
Korea, Republic Of Korea ristricts advertising for fast food
More News on QSR Restaurants

Health and Nutrition

United States Californian Legislature approves bill banning trans fats
Canada 89% Of Children's Food Products Provide Poor Nutritional Quality, But 62% Of Them Still Make Health Claims
More News on Health and Nutrition

Energy and Environment

- OECD report: Biofuel policies in OECD countries costly, ineffective and have significant impact on world crop prices.
United States Do Consumers Care that Frito-Lay's Sun Chips are Solar Powered? Apparently.
More News on Energy and Environment

Food Trends

United States Deloitte Report: Food Retailers and Manufacturers Face a Dilemma as Food Prices Continue to Rise
More News on Food Trends
 

New Companies

Hari OM Industries India
Indian manufacturer of basic small scale potato processing equipment such as potato peelers and cutters. Brand name: Krishna Food machines
NADEC (The National Agricultural Development Company) Saudi Arabia
NADEC is a joint stock public company with equity capital of SR 400 million promoted by the Saudi Government, which holds 20% equity while the Saudi public holds the balance equity. NADEC produces milk products and fruit juices and a range of agricultural products. NADEC is the largest company specialized in the production of processing potatoes in the Saudi Kingdom as it managed, through its numerous  researches and its potatoes analysis advanced laboratories, to ensure the production of best kinds of processing potatoes throughout the year according to the required specifications. As a result, NADEC has been able to cover about 60% of the requirements of factories operating in producing potatoes chips and sticks. NADEC production of  potatoes in its four agricultural projects is approximately 100,000 tons that are supplied under contracts and agreements made with all specialized companies and factories of the Saudi Kingdom.
Kadi AG Switzerland
Kadi is a Swiss manufacturer of frozen foods, including french fries and potato specialties.