Simplot slashes Tassie pea crop

TASMANIA'S pea crop will be slashed by more than a third this year after a reduction in contract requirements by processor Simplot.

After the extremely wet season Tasmania experienced two years ago, Coles had made a decision to diversify their vegetable supply chain and would most likely import  some products from places like New Zealand, Simplot Pea Grower committee chairman Will Green said.

Last season Tasmanian growers produced about 27,000 tonnes of peas, but this year that is likely to fall to about 17,000 tonnes.

Mr Green said the reduction had come as a surprise to many growers, who include peas as a regular part of their cropping program.

“It was a little bit unexpected,” he said. “It hurts and it’s not easy for that to go. The only thing is the price will remain the same, so Simplot have committed to us in that way.”

Mr Green said a significant factor in the crop reduction was the end of an eight-year contract between Simplot and the major supermarkets Coles and Woolworths to supply peas to their generic brands.

He said a change in consumer buying habits since Covid, which is seeing a softening in demand, and some high production years recently had also seen a buildup of pea products.

“I think we probably got a bit complacent about how much Covid had added to the industry,” he said.

“Everything lifted in Covid and with everyone going back, there’s been a slow softening on demand. Simplot are also holding a high level of inventory as well.”

Mr Green said they are hoping this season’s major cuts will not continue going forward, and this is more of a correction. “Simplot is going to see if they can get it to 19,000 tonnes, so they’ll go back out and see what they can find,” he said.

“They’ve gone out to find some more peas in the domestic market as well as looking at some Asian export markets as well to try and increase it up to 19,000 tonnes.”

“It won’t be a big change, but it will be a change that we won’t get,” he said.

Historically, Mr Green said Tasmania has usually grown between 24,000-25,000 tonnes of peas annually.

“In the last five years I think we’ve hit 27,000 tonne records in three of those years,” he said.

Mr Green said on average the gross margin for peas was about $2,000 a hectare, which provided growers with some solid returns.

The cut in area will be done individually with each grower, depending on their circumstances and where they are located.

With pea planting in some areas about to get under way, Mr Green said it was important growers were aware of the changes.

While Mr Green is confident Simplot is committed to the industry and is continuing to invest in new harvesting equipment, he said this is a difficult period that growers would have to work through. He said it would be a shame to see the supermarkets move away from Australian grown products and back to imports.

“We supply such a high-quality product,” he said.

“They told us that’s what they wanted, so that’s what we deliver, and if you go to China you don’t get that,” he said.

Mr Green said peas were a valuable crop for many farmers.

“We’ve worked hard in the last few years to build a decent return for farmers on peas, and I think we have achieved that,” he said.

“Hopefully this is just a glitch in demand, and everyone still wants our product.”

Simplot has been contacted.