Cost Price Calculation for Dutch Potato Growers Shows Slight Increase

The anticipated cost price of consumption potatoes for the upcoming season has once again been determined by the De Nederlandse Akkerbouw Vakbond (NAV). When compared to the anticipated expense for the harvest in 2023, the cost price indicates a minor increase.
The contract prices for the 2024 harvest still need to increase by at least EUR0.2 to EUR0.3 to pay the grower’s costs, according to a comparison between the contracted prices and the required yield price for the grower on French fries potatoes from the 2023 harvest.
NAV’s De Werkgroep Consumptieaardappelen (WCA) has been carrying out these cost price calculations in the same way every year since 2010. This method calculates an average cost price for companies that grow ware potatoes on clay and for companies on sandy soil. Two delivery times are included: off the field in September and out of the shed at the end of March/beginning of April.
Labor, land prices, and crop protection are among the cost components that have grown in the 2024 harvest calculation. On the other hand, fertilizers, electricity, and fuel have declined. As a consequence, the anticipated cost price for the harvest in 2024 is somewhat higher than it was for the 2023 season. The cost price per kg for clay soil, ex-VAT, is EUR0.18 per kg in the field and EUR0.24 per kg for delivery from the shed. The cost price for sandy soil, ex VAT excl. land is EUR0.15 per kg, and the delivery fee from the shed is EUR0.20 per kg.
NAV always charges a premium of 15% on top of the basic cost price for the risk that the grower takes to achieve the desired yield price for the grower to continue growing potatoes in the future.
“The experience of the 2023 season shows that this risk premium on the basic cost price is essential. And this will only become more important in the future due to more extreme weather and the disappearance of crop protection products. This brings the desired yield price for the grower for field delivery on clay soil ex VAT to EUR0.21/kg and for delivery from the barn ex VAT to EUR0.27/kg. For sand, this is EUR0.17/kg for land delivery ex VAT and EUR0.23 cents/kg for delivery from the barn ex VAT,” NAV experts said.
WCA has created a Contract Tool that allows for the comparison of contract prices from several purchasers. According to this, the average contract price for the harvest of 2023 was EUR0.18/kg for delivery at the end of September for all types and EUR0.24/kg for delivery at the end of March. The contract prices for the 2024 crop will thus undoubtedly need to rise by an additional EUR0.2 to EUR0.3 (about 10%) to meet the cultivation costs and ensure the grower’s financial stability.