Fuel costs have “more than doubled” for the Jersey Royal Potato Company this year as volatile oil prices threaten to drive up the price of the potato.
Mike Renouard, business unit director at the Jersey Royal Potato Company, said: “Fuel’s been fluctuating a bit for the last few years with the war in Ukraine. That was compounded by the war in the Middle East.
“Fuel prices started increasing pretty much as we were going into production and it’s been increasing ever since.”
Its heavy machinery rely on red diesel, a slightly less expensive version of what is found at the pumps, while its minibuses which transport its workers to its fields get what’s found at the pump.
But it is not just increasing the cost of fuel, with other aspects of its production and distribution at the mercy of changing oil prices, having a “significant impact,” Mr Renouard said, on its costs.
Different types of fertilisers can be made using oil or gas, so their price is impacted by global events. Meanwhile, plastic – which is used to protect the crop in winter – is made from oil too. Distribution via ferries and lorries are also impacted by oil.
Mr Renouard said that trying to pass on the costs would only increase prices and potentially reduce sales, adding: “I don’t think consumers can afford food prices to go up too much either, so we try and absorb as much of that cost as we can.”
It comes off the back of a year of record breaking weather. Winter was the third-wettest on record, followed by the hottest summer with the most days ever recorded above 30 degrees, leading to a decline in potato yields.
However, Mr Renouard said there could be opportunity as potatoes grown in the UK have also seen a decline in yields.
“That might be an opportunity for us,” he said. “There’s not going to be so many main crop potatoes in store and [shoppers] will be looking for a newer, fresh crop.”
