Potato growers are getting less than one-fifth of the price a consumer pays for their product in the shop, a conference in Dublin today heard.
Speaking at the National Potato Conference in Dublin, IFA President Joe Healy outlined how retailers are taking the lion’s share of the margin on potatoes, while farmers bear all of the risk.
The conference organised by the Irish Farmers Association (IFA) in association with Bord Bia and Teagasc, heard that pre-pack potatoes are retailing at up to €1,400 per tonne while growers receive less than one-fifth of that.
“Many potato growers are having to sell their crop for less than it costs to produce. That situation cannot be sustained; the price the farmer gets has to rise, just to cover storage costs alone. Retailers and packers have to wake up to that and act now if they want to have a potato industry in the future,” Joe Healy warned.
The IFA President said stronger retail regulation and an independent retail ombudsman are needed to ensure farmers get a fairer share of the retail price, and to support a sustainable food supply chain. He said it is important that the recommendations of the Agricultural Markets Task Force are implemented to bring greater transparency and fairness to the food chain.
“Growers make an investment of €60m each year to grow Ireland’s 22,000 acres of potato and ensure a top quality product is consistently available to packers, supermarkets, and the food service sector. In return, processors and retailers who rely on their product must return to them a fair price and stop undermining the market with surplus imports.”
Joe Healy said research to be presented at today’s conference will show just how important potatoes are to retailers. The Kantar Worldpanel figures show that when potatoes are included in the shopping basket, grocery trips are worth €27.90 more than average. Potatoes feature in one-in-ten shopping trips, and these trips contribute 23pc of all retail sales.
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Strong demand from overseas means the European supply of sack kraft paper remains tight. Demand from Asia, the Middle East and North Africa remains high. As a result buyers have had difficulty getting hold of paper, with long lead times and delays in deliveries as a result.
Temporary shut downs of plants in Sweden and Canada recently have taken tonnage out of the market while some US producers have switched production from Kraft paper to more profitable containerboard. These factors continue to affect supply.
The supply situation may ease a little soon with the opening of Segezhas new unbleached sack kraft paper machine at its mill in Karelia. It is not clear how much paper will be available for the market though, and whether this will be able to halt the upwards price trajectory.
On the pricing side, there have been 2 main waves of price increases in January and July 2017, but some prices have moved on a quarterly basis. Unbleached sack kraft paper has seen the biggest moves, rising by €80-100 per tonne on average from January to July, while bleached paper prices have increased by €60-80 a tonne.
Despite the tight supply, paper can be sourced, but at a cost. Some producers have no paper to accomodate extra volume, and have been forced to limit order sizes.
Further price rises may occur this quarter, with deals under negotiation. Many contracts will expire in January, when we are most likely to see a mass price move.
Interesting piece from Richard Hackett in the Indo on the state of the Irish Potato Industry.
Some interesting ideas.
British potato growers have planted an increased area of emerging varieties to serve the fresh packing market, amid reports of increased levels of ‘on-contract’ supermarket supply where prices are agreed in advance.
However, Maris Piper comfortably remains the most planted potato, with treble the acreage of the next most popular fresh packing variety.
Nectar and Melody are the varieties which have increased in area the most this season. increasing their area by 1,000 hectares (ha) and 700 ha respectively.
AHDB Potatoes Market Intelligence Analyst, Amber Cottingham said: “The packing market has seen another increase in area this season, with acreage intended for processing declining once more. This may be due to a reported increase in contracts offered in the packing market as retailers seek to reduce the financial fluctuations they encounter in meeting demand.
“There continues to be some changes in the top 10 list, as newer varieties designed to suit today’s needs – both at an agronomic and consumer level – continue to increase in popularity. Likewise, some of the biggest losers this year are older varieties, which are being replaced by newer alternatives.”
Results were announced in the AHDB Potatoes Area by Variety Estimate.
Overall the area planted that is intended to supply the fresh retail sector has increased for the second year in a row to an estimated 38 per cent of the total planted area in Great Britain, while the area planted to serve the processing sector has decreased, also for the second year running, to 29 per cent.
Amber Cottingham said: “Area changes can be closely linked to the price paid the previous season. For the packing sector, this has likely had an impact, as many prices were favourable during the 2015/16 and much of the 2016/17 season, up to the point when planting decisions would have been taking place.”
The estimate is produced using anonymised and aggregated data from AHDB levy return forms, which is analysed through an ISO controlled process.
Source: AHDB Potatoes
The European Paper industry is a key sector contributing to the sustainable re-industrialization of Europe. There are 185,000 people employed in white, blue and green collar jobs in the paper industry in Europe. Indirectly, 3 million jobs are supported through the supply chain. 633 companies are represented by the Confederation of European Paper Industries (CEPI) and these account for 23% of world production.
The industry’s environmental credentials are second to none. At least 82% of raw materials are sourced in Europe from responsibly managed forests which are more abundant and healthier now than they were 40 years ago. The industry is a large user of renewable energy and achieved a recycling rate of 71.5% in 2015.
Paper and board production in Europe increased gradually until 2007 but suffered significantly from the economic crisis in 2008 and 2009, along with most industrial sectors. However, the European pulp and paper industry remains an important contributor to EU economic growth and job creation, with its performance still stronger than other energy-intensive sectors in Europe.
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The European paper and board industry welcomes the European Parliament report by the rapporteur Christel Schaldemose MEP on implementation of the Framework Regulation on Food Contact Materials. In particular, the paper-based packaging value chain supports the strong call by the Parliament to develop a measure specific to the paper and board materials.
Paper and board is the most sustainable packaging material in Europe. In food application paper-based packaging is number one with 13.8 million tonnes annually.
A well-functioning internal market is key for the paper and board industry, its customers and consumers alike. Yet, until now, specific food contact measures have been developed for only three materials (plastics, ceramics and regenerated cellulose) as well as for active and intelligent packaging. In the absence of common EU rules diverging national measures are now seriously hampering the internal market. These inconsistencies have created legal uncertainty and risks for the entire value chain, and hinder consumers’ confidence in food safety.
The paper industry has always prioritised consumer safety and has set world-class standards for producing safe packaging materials. But it cannot replace the role of the legislator in setting a level playing field and European-wide levels for safety.
In recent years industry has heavily invested in scientific research and is conducting ambitious work on supporting future legal measure thereby extensively upgrading its guidelines for food contact material. We can build upon the latest scientific knowledge, industry state of art practices and European Food Safety Authority’s approach to ensure a high level of consumer protection across Europe.
Good news for consumers!
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J&M Kehoe have over 30 years experience in supplying high quality animal feed sacks to the industry in Ireland. 30 years ago, the feed was all packed in paper sacks but this has changed since and now feed producers use a variety of materials, including polypropylene and polythene.
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It is generally accepted that potatoes keep best when stored in a well ventilated container in a cool, dry location, away from sunlight and excess moisture. It is because of this that paper packaging is an excellent choice for potatoes.
J&M Kehoe stock a wide range of paper potato sacks in various sizes and designs.
Bags in stock include:
Custom printed bags
With our own in house designer we can design and manufacture a custom printed bag for your business.
You can provide us with artwork or simply let us design a bag with your name an logo.
Full colour printing options available.
Please contact us to place an order or for more information.
Packaging, and particularly food packaging, plays a vital role in our society. It can protect products from moisture and contamination and allow products to be transported easily.
Finding ways to recycle our packaging has become more and more important as population and consumption of packaging increases. For example, the UK alone generates 2.4 million tonnes of packaging waste on average each year. Consumers are increasingly looking to businesses to make their packaging reusable and/or recyclable, as the below chart shows.
J&M Kehoe paper sacks and potato sacks are 100% recyclable for your peace of mind. We source our plastic sacks from manufacturers who are committed to using recycled materials in their production.
Valve sacks are designed for high speed filling on spout packers. The bag has a valve on the top which seals itself with the weight of the product when the sack is full. Alternatively, the valve can be sealed, for example using an ultrasonic sealer, to give a more secure, tamper evident or food grade closure.
Valve sacks are best suited to the packing of granular or powdered products such as cement, adhesives and seeds.
Why use valve sacks?
J&M Kehoe supply valve sacks in both paper and polypropylene for a range of applications.
Common uses of valve sacks:
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