Production costs do not fall in line with contract prices

The cost price for the cultivation of processing potatoes will drop in 2026, for the first time in four years. This is the conclusion of the Dutch Arable Farming Union (NAV) based on their own cost price calculation. However, a decrease of 1% to 1.5% is by no means sufficient to compensate for the decline in contract prices. It is striking that the spread in production costs is growing between sand and clay soils. Growing processing potatoes is estimated to be slightly cheaper this year, according to the standard cost price calculation of NAV. This price is, of course, no one's production cost, but by comparing data in the same way year after year, the percentage changes are an important indicator for the profitability in potato growing. Cheaper seed potatoes The decrease is minimal at 1% for delivery from storage in April to 1.5% for delivery direct from the field. It is the result of small negatives and some positives. The biggest gain comes from seed potatoes, for which NAV sets a €200 lower price per hectare in the base calculation. Potato processors claim that costs are dropping more significantly, usually by around €500. Thus, the decrease may be somewhat conservative. Farmers in the Netherlands are getting a little more income from applying slurry. The amounts have been increased by €75 per hectare. This means €375 for sandy soils and €225 for clay soils. The fertiliser prices have been left unchanged. Howevere, here the costs have risen due to levies and higher gas prices. Higher processing costs The total allocated costs, that is: the cultivation costs, decrease by €215 per hectare this season. The total processing costs, which also include labour and machinery costs, increase by about the same amount. This is due to more expensive labour. Other items, such as land and buildings, general costs, and storage costs, have remained virtually unchanged. In the end, the cost price for from field delivery stands at 16.2 cents for sand and 19.8 cents for clay soil. From storage, this is 21 and 25.3 cents. That is a .2 and .4 cent reduction compared to 2025. It is therefore negligible. NAV calculates with 53.5 and 48.5 tons per hectare from field (sand and clay). In April, that is 50.75 and 46 tons per hectare. That is 1.500 kg less than the amount usually used, because yields are under pressure. Irrigation costs (€270 per hectare for 25mm) are not included in the calculation example, while this often occurs in practice. Two irrigation passes add 1 cent to the production cost. The margin for the grower is also not included in the costs. Spread between sand and clay It is striking that growing potatoes on clay soil is getting more expensive faster than for those on sand. Percentually, this is still comparable. Over five years, the cost price for sand has increased by 16% to 18%. For clay soil, it is 19% to 20%. Ten years ago, the difference between sand and clay was €465 to €420 per hectare (from field and storage), while now it has increased to €950 and €1,123. That doesn't sound like much, but on 25 hectares of potatoes, this amounts to an additional €28,000 that a potato grower on clay soil needs when delivering his potatoes in April. This needs to be compensated by the market, by delivering a better-priced quality. Finally, it is also interesting to look at the development of the cost price versus the contract price. Above, you see the price trend on sand soil. In 2023, 2024, and 2025, the average contract price exceeded the cost price level, especially from storage. This is particularly evident on sandy soil. For growers on clay soil, see the graph below, this space is much smaller, and the two lines crossed each other last season. The graphs also show that direct field delivery is significantly being cut while less is coming from storage. Lucrative for 'sand growers' Based on the numbers above, it remains relatively interesting for potato growers on sandy soils to grow processing potatoes. They fare (slightly) better with their cost price compared to their clay counterparts. It must be said, however: the base contract prices do not take into account the higher product quality. Also, the average contract prices for 2026 are not yet completely finalised. The fact remains that the cost increase affects growers on clay soil more severely. Indeed, potato processors are focusing more than ever this year on delivering quality and varieties that fit this, such as Innovator, Agria, but also Lugano. Selective contracts are being made with growers and agreements. On poorer soils, which often include sandy soils, fewer potatoes are being contracted. In the traditional cultivation areas on clay, the volume remains stable. The question is only whether this quality will be paid for sufficiently or if you can still make more margin with solely volume.