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Tuesday,  May 21 , 2024

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News / Life / Food

Say bye to potatoes being as cheap as chips

By Lara Williams, Bloomberg
Published: May 10, 2024, 6:01am

Last year, the word to describe much of the spike in food prices would have been “heatflation,” as drought and high temperatures affected crop yields around the world, from olive oil in Spain (much to my colleague Javier Blas’s despair) to cabbage in South Korea.

This year we’re facing a different concept, still undeniably linked to the climate crisis. Let’s call it “sogflation.” If heatflation refers to price increases as a result of excessively high temperatures, sogflation is borne out of extreme precipitation.

A report published in April, by the European Union’s Copernicus climate monitoring service and the World Meteorological Organization (WMO), showed that while Europe experienced the highest number of days with extreme heat stress, it was also one of the wettest periods on record for many places. The continent received 7 percent more precipitation than the 1991-2020 average, with 1.6 million people affected by flooding.

It doesn’t take a horticulturalist to understand that waterlogged fields aren’t conducive to a productive harvest or plentiful seed-planting.

Potatoes are at the forefront of sogflation. With just one planting and one harvest per year, the conditions have to be just right. But last autumn, poor weather conditions forced harvesting to stop in Europe after just three weeks, as sodden soil meant farmers couldn’t get crops out of the ground. North-Western Europe Potato Growers, a market exchange platform for the potato supply chain, estimates that 650,000 metric tons didn’t make it to market — with many spuds succumbing to rot in anaerobic conditions — and has warned about a 20 percent decrease in seed availability for 2024.

What farmers were able to retrieve was compromised in quality, meaning they couldn’t be stored as long. Sellers rushed to move that limited stock, and prices are now rising as packers and processors are competing over it. Potato shortages for the continent look like a real risk, a problem for one of our staple foods. Europeans eat among the highest quantity of potatoes per capita of any region in the world — about 90 kilograms on average a year. Meanwhile, planting of the new crop may be delayed thanks to waterlogged soil and rain, suggesting that sogflation will bite all year.

English white potato prices are up 81 percent year-over-year, an all-time high according to Mintec Ltd. Market players expect further price increases before the new crop arrives in 2024. In Europe, the Netherlands and Belgium — two key regions that grow processing potatoes for fries — were the worst affected, with Dutch processing potato prices at their highest level recorded for April at €370 ($397) per metric ton.

Grains have also been affected. After a poor winter planting season, growers are struggling to get on their fields for spring sowing. An AHDB survey shows cropped areas of wheat, oilseed rape and winter barley in the UK are down significantly — pushing up local prices and leaving the nation more reliant on imports. French wheat planting has been significantly delayed, too.

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It’s not just vegetables and grains affected by the wet weather. Livestock farmers have seen high mortality rates in lambs, while dairy cows in affected areas are unable to be turned out on grass — reducing milk yields and raising production costs.

Food production has always been at the mercy of the elements. But, given our global food network, we’re in a much better place to weather the weather. We can count ourselves blessed that we’re not Londoners in 1258, where a third of residents died in a famine. An immense volcanic eruption in Indonesia caused global temperatures to dip, leading to crop failures thousands of miles away.

But while that was a freak one-time event, we are causing our current woes with our fossil fuel emissions, leading to pervasive extreme weather. Harry Campbell, a commodity market analyst at Mintec, told me that, as consecutive years of bad weather stack up, it’s increasingly hard to recover from a poor season, while in some locations, farmers lurch from dealing with drought to flooding.

Facing a lot of risk and uncertainty, Campbell tells me that commodity purchasers are contracting more — agreeing on a price and amount in advance of the harvest — to reduce their exposure to volatile price swings, as well as increasing the numbers of growers or countries they’re sourcing from.

You might remember the empty shelves and rations on tomatoes, peppers and cucumbers in early 2023, after Spain and Morocco — the UK’s main sources of produce in the winter months — were hit by adverse weather conditions. Supply chains will need to be more flexible, and ultimately more complex, to keep food supplies secure at a time where one supplier could be facing floods and another a serious drought.

Farmers in the meantime are left with the short straw, fighting poor weather to try and fulfill their contracts — some of which won’t be met — while facing other rising costs and pressures.

Changes do need to happen in agriculture to reduce emissions — food systems are responsible for about 26 percent of greenhouse gas emissions — but clearly more support is needed as food production is only going to become more risky, expensive and stressful.

As sogflation pushes up potato prices further, we may have to rethink the phrase: “As cheap as chips.”

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