Coronavirus has rapidly introduced a huge amount of market disruption and uncertainty to the potato industry.
Updated 24 April 2020
Coronavirus has rapidly introduced a huge amount of market disruption and uncertainty to the potato industry. Whilst some potato sectors have seen a huge increase demand usually only associated with Christmas, others have been severely impacted by the closure of McDonalds, fish and chip shops, and the wider food service industry.
Bagging and chipping markets
Fish and chip shops: The almost blanket closure of fish and chip shops has had a major impact on the bagging sector. Some growers have successfully redirected 25kg bags to local grocery stores where demand has been high. Growers that are unable to do this are encouraged to contact potato packing businesses to sell into the mainstream retail market. Mainstream retailers will not take 25kg bags of unwashed potatoes directly so growers may have to supply in bulk. The NFU is encouraging retailers to relax specifications in order to take potatoes that were originally destined for the food service sector.
McDonalds closure: The NFU is also aware that the closure of McDonalds is having an impact on the supply into McCains, and growers have been approached with a voluntary request to reduce their cropping area. Growers are encouraged to carefully check their contracts and contact NFU CallFirst if they have concerns.
The ADHB estimates there to be 188,576 tonnes of chipping potatoes which have been impacted by market closures. For a full breakdown of that figures please follow this link.
CIPC residues and derogation
Following a successful application by FPSA, potatoes treated with higher dose rates of CIPC are now permitted to be sold on supermarket shelves. For further information please follow this link.
National Federation of Fish Friers (NFFF)
The NFFF is the main trade association for fish and chip shops covering approximately 40% of the trade, and the NFU has been in discussions regarding support for the reopening of shops. Their initial guidance to their members suggested that shops close due to safety fears and difficulties maintaining social distancing, as well as significant negative publicity. However, the NFFF has since updated their guidance to cautiously welcome the reopening of fish and chip shops subject to strict adherence of government guidelines on social distancing. We understand that some previously closed shops are beginning to slowly reopen, with approximately 30% to 40% believed to now be open, and so growers are advised to contact their existing customers. It should be noted that not all fish and chip shops will be suited to reopening under social distancing conditions. By far the most straightforward outlet for chipping potatoes is the original supply chain, and so the NFU is continuing to look at options to support the reopening of fish and chip shops.
A provider has been chosen to run the AHDB portal which will facilitate growers with excess stock to contact with potential buyers. The NFU is currently inputting into the final detail and set-up and this should be operational within a week.
Compensation for lost product
As with many crop sectors that rely on the food service sector (plus ornamentals growers that rely on garden centres) we are making the case to government for compensation for lost product, and are therefore putting together an impact assessment for the sector. This includes potatoes that were destined for the food service market.
The NFU is providing an information gathering service on behalf of the agricultural and horticultural industries across the UK to assist the government in building a dynamic and up?to?date picture of the impact that the COVID-19 outbreak is having on farmers and growers. We’ve put together a reporting form that growers can use to provide information on any business?critical issues they have encountered, or expect to encounter, arising from the COVID-19 outbreak. The NFU will log this information and use it in an anonymised format to flag the key issues agriculture and horticulture are facing to government on a daily basis. However, no personal data will be shared with the government. To access the reporting form click here.
Inputs and transport of seed and ware potatoes
The NFU has heard reports of growers unable to get potato stocks to packers and processors due to a lack of transport availability. Equally there have been reports of difficulties obtaining seed potatoes for the current planting season, with some growers having to travel significant distances with their own transport.
Deliveries are reportedly still coming through for other inputs such as chemicals and fertilisers although there are reports of delays and increased delivery costs. Spares for machinery are also a concern during the planting season, with difficulties obtaining spares reported. Growers are encouraged to place orders in good time to ensure their timely delivery.
The NFU successfully ensured that agricultural workers were included under the ‘key worker’ heading, removing some of the immediate concerns over carrying out the day job and without a sudden extra burden of childcare.
There is likely to be pressure put on the permanent workforce due to sickness and self-isolation. Please read the government advice on how to keep workers safe.
There has been an immediate impact on the availability of seasonal workers, due to borders closing and so workers being unable to travel. There has been a large push to recruit UK workers into roles, but there are limitations, such as the workers being inexperienced, and that they are likely to return to previous roles once the crisis reduces. There are also key issues around securing derogations for furloughed workers to be able to pick up these roles without losing their 80% government pay package.
The NFU is therefore also working to secure continued access to EU and non-EU seasonal workers, particularly as the experience of ‘returnees’ is critical to the running and productivity of businesses.
For further information please refer to the NFU labour briefing here.