POTATO COST SQUEEZE to continue in 2019
The real market price of potatoes has been flat in recent years, while real production costs are rising. The production cost squeeze will therefore continue in 2019, according to Dr André Jooste, CEO of Potatoes South Africa (PSA).
The area planted to potatoes would probably not change much for the 2019 harvest, he said.
“Since 2015, national plantings have varied between 52 000ha and 54 000ha. Last year 53 000ha of potatoes were planted, which is about 2% more than the 2017 plantings. Although annual plantings fluctuate, it is climatic conditions that determine the size of the national crop,” he added.
According to Jooste, the implementation of the national minimum wage resulted in a sharp increase in labour costs.
SPORADIC RAIN MAKES PRODUCTION MORE DIFFICULT
Coupled with an expected 19% increase in electricity tariffs, production costs would rise even more in 2019. “However, the increase in potato production volumes since 2017 is still a sign that producers are doing the right things to improve sustainability.”
Theo Ferreira, a potato producer near Harrismith, said production conditions had been very tough in 2018 as he had received very little rainfall. The rain had also occurred sporadically, which made sustainable production even more difficult. At a dryland yield of between 20t/ha and 22t/ha, producers would have to realise a price of between R45 and R50 for a 10kg pocket of potatoes in 2019, he said. – Annelie Coleman