Potato growers in key growing states say unless supermarkets add 20 cents per kilo to the shelf price of their products, exit from the sector will be inevitable.
Most important points:
- Potato growers supply the Australian fresh and frozen sector all year round
- As production costs rise, growers say their yields are no longer sustainable
- Crisis meetings are underway between farmers in key growing regions of Australia
Farmers across all sectors are struggling to absorb production price increases of 50 percent and more due to global factors, including the war in Ukraine and exponential increases in fuel, fertilizer and farm maintenance costs.
Potato growers are generally tied to a pre-harvest price agreed with processors, and as a result their yields do not fluctuate as demand or cash register prices for their produce rise.
The situation has prompted them to advocate for wholesale and supermarket buyers to consider an urgent price review.
‘Just a necessity’
Potato growers in the Western Australian growing region of Busselton have launched an awareness campaign to bolster public support, while urging supermarkets to add 20 cents per kilo to offset the spike in production costs.
Third-generation grower Keith Taylor described the push as essential.
“We are all very well aware that consumers are already being hit by price increases for the essentials, but our situation is no longer tenable,” Taylor said.
“Our production costs have already risen 17 percent since October and some of those costs are increasing on a weekly basis – there is no sign of declining.
“It’s just a necessity.
Fellow Busselton farmer Darryl Smith said the increased diesel price has pushed his fuel bill for a return trip to Perth — where he delivers potatoes several times a week — from $230 to $450 in 12 months.
“It’s not limited to fuel, though — everything has gone up,” he said.
“The truck repair costs, freight costs have increased and labor costs have increased, so I am now driving the truck to Perth myself.”
Growers in Busselton hold regular meetings to discuss the way forward while monitoring each other’s mental health.
“I wouldn’t say the mood is right,” Taylor said.
‘We all have to intervene’
Tasmanian potato growers supply much of what is used in the Australian takeaway and frozen food sector, including products such as chips and wedges.
Grower Leigh Elphinstone said talks are underway with processors, but he urged shoppers to be aware of the outside forces that have fueled their push for price increases.
He said Tasmanian growers shared the sentiment of their WA counterparts.
“We need to sell our story, explain where we’re coming from and what problems we’re dealing with,” Elphinstone said.
“We have no control over these factors.
“Things like the wild weather we’ve been through – in the last 10 years every record has been broken, be it the wettest, driest, coldest or hottest year.
“We need to teach consumers that we are all in this together and if we want the best quality food, we all need to do our part and help each other through it.”
Look for middle way
AusVeg National Public Affairs Manager Tyson Cattle said data showed that prices for fresh vegetables had increased by more than 7 percent in the past two years, while production costs had risen 35 to 45 percent in a comparable, if not shorter, period.
Mr Cattle said talks are underway with wholesaler and supermarket buyers to “strike a balance” between supply retention and fair returns for growers.
“Historically, fresh produce growers have been price takers,” says Mr. Cattle.
“Everyone is aware of the challenges out there, but we need to find a middle ground in terms of what is a reasonable price for consumers, sustaining that demand while ensuring that farmers get a fair price.”
Landline contacted some of Australia’s largest supermarket buyers and processors.
A Woolworths spokesperson told the ABC that for the past six months it had been “collaborating on our pricing with our regular suppliers, bearing in mind inflation-induced cost pressures”.
“We will continue to work closely with our suppliers to understand variations in the market and jointly address industry-wide challenges,” they said.
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