TRADE AND MARKET I NG Ensuring the price is right Potatoes are priced differently across either side of the Atlantic, but markets are still growing for key players. Prices are always a hot potato where, understandably, the farmer seller wants to maximse the value of their crop and, understandably, buyers want to get as much value as they can. But analysis of potato markets from either side of the Atlantic show that there are different approaches to pricing, although there is a general trend to the use of contracts to create more certainty for both main parties in the potato chain. Over the years the USA and Belgium have become potato powerhouses. The USA produces around 18 million tonnes of potatoes a year exporting more than a million tonnes of potatoes and potato products a year. By processing its own potatoes and some of its neighbours, Belgium exports more than two million tonnes of potatoes and potato products a year. Traditionally both have taken different approaches to pricing potatoes. For many years the US has largely used contracts, while Belgium’s industry has relied on free-buy sales to satisfy its needs. This has resulted in significantly different levels of price volatility. As chart 1 shows, US prices have been rela100 150 200 250 300 350 400 50 0 2010 2011 2012 2013 2014 2015 2016 Chart 1:Average June potato prices in USA, Belgium and G Britain. 2010=100 USDA June potato price Belgapom average June free-buy price AHDB GB all-average June price Chart 2. US potato production and prices 18,5 19 17,5 18 16,5 17 15,5 16 15 2009 2010 2011 2012 2013 US autumn potato production in million tonnes USDA following June price 2010=100 Lineair (US autumn potato production in million tonnes) 2014 2015 100 120 20 40 60 80 0 tively stable. Using figures from the US Department of Agriculture and 2010 as a base year, average June prices since then have not been less than 87.6% of In Britain there has been a trend of falling production since 2009. Potato World 2016 • number 3 31 Million tonnes Price. 2010=100 Pagina 30
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