TASMANIAN potato farmers are threatening to stop planting spuds if major processors don’t increase their prices this season. It’s likely to prompt a potato shortage after what farmers have described as a “terrible season”. And with a lettuce shortage already hitting fast food outlets it’s possible chips might be next.
Bad weather and rising input costs combined with low prices means the number of potatoes planted next season could be significantly reduced. It’s understood farmers who sell to one of the state’s major processors, McCain, are contractually prohibited from speaking out publicly and others are reluctant fearing a fallout. However, growers are so worried about the upcoming season that one farmer has written a letter to Tasmanian Country.
“Farmers are feeling the pain after a terrible spud season, due to bad weather and rising growing costs. That pain increases tenfold for the farmers who haven’t even managed to finish their harvest with an estimated 40,000 tonnes of potatoes still in the ground,” the farmer, who wishes to remain anonymous, wrote. “If those potatoes are lost those particular farmers will no doubt turn to growing more grass or another crop that, like the majority of commodities, has risen in price and profits but with far less risk.
“Last season’s price was negotiated by the farmers just before their main growing expenses of fertiliser and fuel went up by more than 50 per cent, along with just about every other input. “The chance of having a good crop next year has already been reduced for some as one processor has a percentage of seed for next season’s crop still in the ground, severely reducing quality.”
Farmers were getting paid 32c per kilo in 2008-2009, 13 years later and this amount has increased by just three cents per kilo to 35c per kilo.
Growers say the costs of production have more than doubled since then and farmers are faced with shorter rotations, reducing seed quality and massive shortages of chemicals used to treat seed which all lead to poorer yields. “Growers are going to need a significant price rise to make growing this coming season’s crop viable,” the farmer told Tasmanian Country. “Unfortunately, growers know all too well that this is not simply a case of explaining gross margins to the major processors as they are nearly always dismissed because we have to compete with Europe and the US regardless of costs. “Unfortunately for farmers the large fast-food outlets that these processors supply are always ready to import a lesser quality product to save themselves paying what our potatoes are worth.
“We realise that is hard to believe but some freight companies are also price gougers and Bass Strait is a large disadvantage for Tasmanian potato farmers giving international growers good export options.’’
Potatoes are in short supply across the world meaning farmers should be in a good bargaining position when it comes to price. “Unfortunately this year with the current input risks and unstable climate we have no choice but to say we have had enough of being ripped off for our premium product and they either pay a fair price or don’t get the potatoes,” the farmer wrote.
Primary Industries Minister Jo Palmer has encouraged growers and processors to work together. “The industry is showing remarkable resilience, with strong levels of production and increasing value in 2019-20, despite challenging weather conditions and COVID-19,” Mrs Palmer said. “Contract negotiations are industry considerations, and I encourage growers and processors to work together to negotiate mutually agreeable outcomes.” Tasmania is the second largest producer of potatoes in the country, producing 450,000 tonnes annually with a farm gate value of $137 million, and a processed value of $457 million in 2019-20.
Both Simplot and McCain growers have held meetings with their respective TFGA committees in recent weeks as they start the negotiation process. The issue of rising input costs was raised by concerned farmers at the McCain AGM, with fuel, fertiliser and land leasing costs discussed alongside the increased competition from other commodities like livestock and cereals.
All positions on the TFGA McCain Potato Grower Committee were declared vacant before 11 new members were elected, representing all the major growing areas across the state, with Northern Midlands farmer Tom Lindsay elected as chair of the committee. Committee representatives have declined to comment on the specifics of negotiations