The UK Agriculture and Horticulture Development Council (AHDB) has prepared a report on the challenges that the UK agricultural sector has encountered and will face in 2020.
A brief announcement of the report is published on the website. Potato News Today. We present a part of the text concerning potato.
As noted in the report, the coronavirus pandemic, in general, had a significant impact on the formation of demand for potatoes this year.
Of course, it must be borne in mind that many farmers decided on planting volumes before the virus hit the UK and quarantine restrictions were imposed. At the same time, a number of producers managed to reduce the area, but there were also cases when unsuccessful crops of winter grain were replaced by potatoes.
Spring in most regions was dry, which made it possible to plant at a good pace. At the same time, some agricultural producers expressed concerns that for the development of plants at the initial stage there may not be enough moisture, but in June rains came in a very timely manner. In addition, let's not forget that more than half of the area reserved for potatoes in the UK is equipped with irrigation equipment.
Thus, we can assume that the volume of harvest this season will not be reduced. Although the results are too early to sum up: meteorologists promise that the end of the summer will be "drier and warmer than usual." If the forecast comes true, this may affect the final result.
Before the outbreak, many experts suggested that stocks of potatoes from the 2019 harvest may not be enough until the new season's products. But catering facilities were closed throughout Europe, so there was no need to talk about the shortage.
What could this lead to in the future? First, Britain’s need for potato imports for processing next season is likely to decline. If the harvest takes place in a timely manner and with a good result, the British processors will be provided with domestic products.
Secondly, it is known that by the middle of spring around 2 million tons of potatoes from the 2019 harvest remained unrealized in Europe. Currently, European processors are fulfilling their contractual obligations, but part of the stock still had to be sent for other purposes at a reduced price (for example, to put on animal feed). Against this background, it is difficult to predict a price increase in the market.
In addition, the consequences of Brexit must also be considered. At the time of this writing, the UK has not yet been granted equivalence status to a third party, and this could stop the British export of seeds or fresh potatoes to the EU market.
Packaging and processing sectors
The coronavirus pandemic had a huge impact on potato growing. Although its consequences, say, in the packaging and processing sectors were felt differently.
The packaging sector primarily serves the retail market (about 80%). At the peak of panic purchases in March, a huge leap was observed in this area. Since then, the demand for packaged goods has noticeably decreased, but has not fallen “to the bottom”: despite the fact that most catering enterprises resumed their activities on July 4, many people continue to spend most of their time at home and eat home-cooked meals.
Another situation in the processing sector. The closure of cafes and restaurants had a profound impact on the industry (catering accounted for 55-60% of the market). And although catering establishments are gradually resuming their work, the demand for their services is still far from what was observed before the pandemic. The expectation of an economic downturn also negatively affects the situation.
Potato consumption trends
Before COVID-19, overall retail sales of potatoes were declining. Traditional food has lost its relevance. But the main problem, according to Kantar Usage, was that preparing potato dishes required a significant amount of effort and time from the consumer. Many also considered potatoes to be too high in calories and not related to healthy foods. Together, this led to the fact that more and more consumers said they intend to reduce potato consumption (15%). However, only 8% planned to increase consumption (AHDB / YouGov Consumer Tracker, February 20).
During the COVID-19 pandemic, potato retail sales increased significantly (+ 21,6%). For comparison: total food and beverage sales increased by only + 14,7% (Kantar, May 12–17, 2020). The fastest growth was noted for canned potatoes and chips, the popularity of these products was explained by long shelf life.
In general, during the quarantine period, potatoes won due to their versatility and price category. This helped offset the closure of catering establishments and schools, which typically accounted for about 22% of potato consumption.
If we look at the prospects of potatoes in retail for the remainder of the calendar year, we can assume (in almost any development of events, including toughening quarantine measures) that product consumption will increase slightly.
At the same time, the potato sales sector for processing is likely to experience a decline.
Summing up, we can summarize that the current crisis situation benefited the fresh potato market, an economical, satisfying product suitable for preparing a wide variety of home-cooked dishes was in demand among the population.
No less perspectives are opening up today for inexpensive frozen potato products, which save consumers' money and energy. Chilled ready meals (mashed potatoes, gratin, etc.) will be especially in demand.
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