REO Auctioneers are based in Roeselare, Belgium. They ended 2019 with record sales of €208 million. That makes last year the best the cooperative has ever had. For the second year running, tomatoes have been the most important product. It is followed by leeks, REO Auction's traditional showpiece. "We made €23 million more than in 2018. We also had a 5% increase in volume," says Paul Demyttenaere, REO Auctioneers' Director.
Director Paul Demyttenaere
Extreme climate conditions
“For the second year in a row, we were confronted by extreme weather conditions. The dry, especially extremely hot summer, had a major effect on full soil vegetable price formations. In the first half of the year, a lot of the previous year's storage products were put on the market."
"That was done at stable prices. That had to do with the shortages in Western European markets. In the summer and autumn, there was again an irregular supply of outdoor vegetables. That caused a renewed shortage of several kinds of vegetables. As a result, we could make good money on the fresh market," says Paul.
Flemish leek cultivation under pressure
“Leeks are our number two product. The price formation for these was stable throughout last year. There was also a clear demand in the European market. However, Flemish leek cultivation is currently under threat," Paul continues. "This is due to the Flemish fertilization regulation."
Fertilization and vegetable farming is considered to be sources of nitrate pollution. In 2019, this draconian rule was established. It is so far removed from practice that we had real concerns for this crop. Leeks are good for sales of €36,5 million. Leek farming in West Flanders ensures a net trade surplus of €30 million."
"This is simply being tossed to new production areas. These are in Spain, Portugal, France, and Eastern Europe. This absurd MAP6 regulation does not only affect leek cultivation. It also influences crops such as cauliflower, cabbage, celeriac, and Brussel sprouts," explains Demyttenaere.
According to the REO Auctionhouse Director, the authorities must consider vegetables with knowledge of cultivation techniques. They must also abandon the preference for agricultural farming. "It must be about numbers and knowledge. Look at MAP6 and the early sowing of green fertilizers. I know leeks and other outdoor vegetables absorb far more nitrogen from the soil in autumn than with green fertilizers. This is, however, being completely ignored."
“Considering fruit-vegetables, the tomato is at number one for the second year running. These volumes have almost doubled over two years. This increase is partly thanks to my predecessor, Noël Keersebilck's, efforts. He wanted to create a glasshouse horticultural region in Roeselare. This area has eventually been realized. It is coupled to the heat released by the incineration that occurs at the MIROM recycling center."
"The other reason for this growth is the strides we have made concerning Northern France. We sold nearly 60 million kgs of tomatoes. Of this, more than 30% are French products. For 2020, we expect a further increase in volume of seven to eight million kgs," Paul adds.
Strawberries, chicory, and mushrooms have retained their positions in the REO top ten products. With 36 million units, cucumbers have remained in roughly the same spot. The same is true for courgettes with 32 million units. Cabbage and celeriac are in the top ten thanks to 2018's storage products' stable price formations.
"Of REO Auctioneers' revenue, 75% is made up of our two house brands in mainly France and Belgium. The increased French product in the cooperative's assortment clearly shows the growth in the French market's interest. In the coming years, we are going to establish our position in the French market further. We are going to focus intensively on quality too," the Director says.
"We are delighted with our €208 million turnover. The favorable market prices are a fair reward for our producers. They maintained their products' quality through the extreme climate of 2019. That was thanks to a great deal of effort. The main concern for the future is the outdoor farming regulation."
"Too often, we see ideas emerging that sacrifice the quality of harvested crops. Know, however, that a Flemish horticultural sector that compromises on quality will never become a regional Flemish player. That means, for this auction house, we would only see annual revenue of, at most, €100 million," concludes Demyttenaere.