Three major trends in the future development of the potato industry, focusing on the present and looking forward to the future

The Market Law of Constant Price Determined by Supply and Demand01. Review of the pastThe fundamental reason for the cliff like decline in potato market prices in 2021 and the continuous downturn in potato market prices in 2018 is undoubtedly the severe oversupply. Among them, in 2016, due to the decline in corn prices, a considerable number of corn growers saw the abundant profits of potato growers, coupled with the stimulus of the national main grain strategy, and made decisive adjustments to the planting structure; There are also winter fallow areas south of the Yangtze River that, under the guidance of national industrial policies, have utilized favorable conditions for planting potatoes during the winter fallow period to expand the planting area of off-season potatoes; Furthermore, a considerable number of small retail investors have blindly followed the trend of expanding the planting area after hearing about the introduction of the policy of turning potatoes into staple crops. Therefore, a passive situation is formed where production exceeds demand.However, the painful lessons of 2017 were not enough to awaken people to change the tide, and there were also many who were not convinced and had the idea of taking another gamble, hoping that the potato market price would experience a miraculous rebound or jump up. However, the market is ruthless, and prices have been consistently low for the past year. So far, consumer demand has also become particularly cold, and according to surveys, it is due to the impact of the current low prices of green leafy fresh vegetables. In such a situation, it is worth making the right choice for potato farmers for the coming year!02. The price tag has been played out of dateSome people may still be thinking about the potato three-year cycle theory, hoping for luck to turn around – there will be a big change in 2019; Or perhaps someone is thinking in the opposite direction – if everyone stops planting, then I will; Or some people say that losing two years for potatoes and earning one year is enough! This kind of lucky, blind, speculative idea is really unreliable! You should know that in the future, the potato industry will not rely on price fluctuations to speculate and make money, and the prospects for price increases are slim. But why do you say that?One thing you can think of is that others will also think of it. If everyone thinks like this, it’s like not thinking the same thing.The second is to expand planting in the southern region through the use of winter fallow land, filling the gap in fresh potato production during winter and increasing supply sources.The third is the three-year cycle law in the past, which is largely limited by storage capacity and off-season production capacity. In the past, with limited conditions, the market is highly likely to experience short-term shortages or even supply disruptions, resulting in significant price fluctuations like a roller coaster. At this time, there will be short-term speculative opportunities to make big money, even losing two years to earn a year is enough! But are these ‘old calendars’ still effective? Countless controlled atmosphere warehouses and underground cellars have been built in potato producing areas across the country, driven by the market. In addition, in the past two years, news media have repeatedly boasted about “golden eggs” and “silver eggs”, which have supported the construction of more cellars in poverty alleviation projects in the main potato producing areas. Therefore, can price fluctuations still have a “roller coaster”? The three-year cycle law will not occur significantly. Instead, it will gradually fade out of the industry.03. Expanding consumption requires a longer journey processIn addition to fresh potato consumption, some people may think of “staple food” consumption. Yes, the implementation of the national potato staple strategy depends on the popularization of “staple food”. What is the concept of staple food? It is to guide consumers to popularize and expand the consumption of potato flour, chips, potato chips and other foods as well as fresh potatoes. But this requires the gradual change and recognition of people’s eating habits and food culture. The main grain strategy is to purchase and reserve whole flour and starch. On the one hand, the processing industry is starting, and on the other hand, the reserve has not yet been included in the plan. These all require a long process, and it is impossible for the policy to have an immediate effect as soon as it is introduced, so it is still unreliable for the time being!12.jpg02The pattern of North Potato South Diversion is gradually changing!01. Guiding OpinionsAfter potatoes were identified as the fourth largest staple food in China, the Ministry of Agriculture issued the “2016 National Potato Production Guidance” on the development of the potato industry, providing specific and detailed guidance for potato cultivation in various regions. The introduction of this guidance will inevitably affect the production, consumption, and market fluctuations of potatoes in various regions, break traditional consumption habits and the pattern of “North South Potato Diversion”, and thus have a significant impact on the market of traditional planting areas. The Opinion not only guides the production of potatoes in 11 provinces and regions in the north, 10 provinces and cities in the central plains, and five provinces and regions in the southwest, but also encourages the expansion of the cultivation of marketable winter fresh potatoes in the five provinces and regions in the south. This will inevitably squeeze the traditional southward transfer of northern potatoes.02. North Potato South Diversion Will Not ReturnBecause the south produces potatoes all the year round, and the planting area is increasing, the production technology is gradually mature, and the output is increasing year by year, the tradition of transferring from north to south potatoes in the past will be completely broken, not only that, but also the market price will be strongly impacted by fresh southern potatoes.13.jpg03The transformation of main grains forces the potato industry to increase production and reduce costs01. Form of main grain transformationThe implementation of the potato staple food strategy means that potatoes have become the fourth largest staple food after rice, wheat, and corn, and a new billion dollar market is opening up. The staple food of potatoes is actually to process potatoes into staple foods like Mantou, noodles and rice that conform to the Chinese diet habits. In the future, potatoes will become the main staple food, and their main consumption forms will be whole flour, starch, French fries, potato chips, and fresh food.02. Main grains also need to be included in the costAt present, the cost of finished potato flour is around 10000 to 12000 yuan per ton, which is much lower than the prices of rice and flour. Not to mention that consumption habits have not yet caught up, a single consumption cost is the bottleneck for the future promotion of potato staple food. To solve this problem, processing enterprises must focus on acquisition costs and processing costs. Therefore, it is very unlikely to rely on potato staple food to drive potato prices at present.03. Increasing production capacity and reducing costs is the way outIn this way, in order for the potato industry to survive and develop in the long term, it must tap into its potential from two aspects and strive to expand its profit margin. One is to rely on technology to increase production capacity, and the other is to rely on mechanization to improve efficiency and reduce production costs