Opinion

Spanish Potato Producers Challenged by High Production Costs and Unfavorable Weather

Fresh Common Potato
Spain
Published Apr 28, 2022
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High production costs of fresh potatoes have affected farmers in Spain. Fertilizer prices increased 48%, fuel prices increased 134% and electricity prices grew by more than 300%. This caused acreage to decrease in some regions of Spain, while still fighting with unfavorable weather conditions like frost, heavy rain, drought, and even sand haze. Price is still holding steady at USD 0.49/kg, a mild increase of 2.36% WoW. Expectations for 2021/22 are that production will be lower than the year before, but still, it will depend on the weather conditions in the following period.

Potato producers in Spain face significant challenges in MY 2021/22 due to weather anomalies. The nation has experienced a transition from sand haze to heavy rain and frost and drought in more severe regions. In such conditions, potato plants are more vulnerable to diseases such as fungal disease. Furthermore, due to the implementation of new regulations in Brussel on the use of pesticides based on the active substances dimethomorph and mancozeb, farmers face difficulties maintaining satisfactory quality and yield of potatoes. According to the production data from 2016 to 2020, we can see a downfall of 10.17%, to 2.1M mt in 2020. Early estimates for MY 2022 are that production of extra-early potatoes has increased by almost 3% YoY, to 77 thousand mt. On the other hand, the price of potatoes in Spain has slightly climbed in April 2022, to USD 0.49/kg, a 2.36% increase WoW.

This year was particularly challenging given the rising cost of fertilizers and fuel, which increased by more than 48% and 134%, and unfavorable weather like frost, sand haze, and heavy rain. These factors contribute to plant stress, making them susceptible to various diseases. One, in particular, is Alternaria solani, a fungal pathogen that produces a disease in tomato and potato plants called early blight. According to the Valencian Association of Farmers (AVA-ASAJA), the lack of pesticides based on active substances mancozeb and dimethomorph and stressful weather conditions reduced 50% of the pending potato harvest Valencian regions of L'Horta and La Ribera, despite 14 applications since December 2021. In addition, the European Chemicals Agency (ECHA) has classified mancozeb as toxic to reproduction, while the European Food Safety Authority (EFSA) has identified it as an endocrine disruptor. While this is good for the environment and our health, farmers have fewer options to protect their crops.

Not all regions in Spain were affected by bad weather. For example, potatoes in Castilla y León are now in the harvest. While the early potato harvest is over, the later potatoes will come in April. Some sources, such as COAG, estimate that the cultivated area of potatoes is around 16,000 hectares, far from 20,000 ha, which is considered an optimal surface based on past experiences with the correlation between price, supply, and demand. The decrease in the production area was caused by the rise in production cost. According to Eduardo Arroyo, president of the Association of Potato Producers of Castilla y León (APPACYL) production cost of fresh common potatoes raised €4 cents/kg in 2022. Among them, energy used for water irrigation was the main cause of cost uptake.

Expectations for 2021/22 are that production will be lower than the year before, but still, it will depend on the weather conditions in the following period. The price of potatoes is currently holding at USD 0.49/kg, and indications are it will remain at this level. However, producers face increases in production costs, making the crop less profitable. Therefore, producers may turn to more profitable crops if there is no significant state aid.

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