Potato growers in key crop states say that unless supermarkets add 20 cents per kilo to the selling price of their produce, outflows from the industry will be inevitable.
Key points:
- Potato growers supply Australia’s fresh and frozen food sector year-round
- As production costs increase, producers say their yields are no longer sustainable
- Crisis meetings are being held between farmers in key crop regions in Australia
Farmers in all sectors are struggling to absorb increases in production prices of 50% or more caused by global factors, such as the war in Ukraine and the exponential increases in the costs of fuel, fertilizers and farm maintenance.
Potato growers are generally tied to a price agreed with processors before harvest, and as a result, their yields do not vary as demand or output prices for their products increase.
The situation has led them to advocate for wholesale and supermarket buyers to consider an urgent price review.
“Just a necessity”
Potato farmers in the Busselton crop region in Western Australia have launched a public awareness campaign to bolster public support as they call on supermarkets to add 20 cents a kilo to offset rising production costs.
Third-generation producer Keith Taylor described the push as essential.
“We are all well aware that consumers are already affected by price increases of the essentials, but our situation is no longer sustainable,” Taylor said.
“Our production costs have already skyrocketed 17 per cent since October and some of those costs are rising weekly, showing no sign of declining.
“It simply came to our notice then.
“We have growers about to leave and it will be inevitable for some to do so if they don’t listen to us.”
The mood among Busselton potato growers remains tenuous, as high production costs continue to affect declining yields. (Fixed line: Anthony Pancia)
Busselton’s fellow farmer Darryl Smith said the rise in the price of diesel had caused his fuel bill for a return trip to Perth, where he delivers potatoes several times a week, to 230 to 450 dollars in 12 months.
“While it’s not limited to fuel, it’s all increased,” he said.
“Truck repair costs, transportation costs have gone up and the cost of labor has gone up, so now I’m driving the truck all the way to Perth.”
Busselton producers hold regular meetings to discuss a path to follow while monitoring the mental health of others.
“I wouldn’t say the mood is good,” Taylor said.
“If you had to take a long, cold look at it from an accountant’s point of view, it’s hard to make a case to go on.”
Tasmanian potato grower Leigh Elphinstone urges buyers to consider how issues beyond farmers ’control could affect prices. (Supplied by: Michael “Chook” Brooks)
“We must all participate”
Tasmanian potato growers supply much of what is used in Australia’s takeaway and frozen food sector, including products such as chips and wedges.
Producer Leigh Elphinstone said there were talks with processors, but urged buyers to be aware of the external forces that drove their push to raise the price.
He said Tasmanian producers shared the sentiment of their WA counterparts.
Potato farmers are struggling with rising production costs. (Fixed line: Anthony Pancia)
“We have to sell our story, tell where we came from and the issues we’re dealing with,” Elphinstone said.
“These factors are out of our hands.
“Things like the wild weather events we’ve been experiencing: over the last 10 years all records have been broken, whether it’s the wettest year, the driest year, the coldest or the hottest year.
“These extremes are definitely coming into play.
“We need to educate the consumer that we are all together in this and that if we want to eat the best quality, we all need to get involved and help each other.”
Learn more about the cost of living in Australia:
Look for a middle ground
AusVeg national director of public affairs Tyson Cattle said the data revealed that fresh vegetable prices had risen more than 7% over the past two years, while production costs had risen between 35 and 45% in a similar period, if not shorter.
Mr Cattle said there were talks with wholesale and supermarket buyers to “strike a balance” between maintaining supply and equitable performance for producers.
“Historically, producers of fresh produce have taken prices,” Cattle said.
“Everyone is aware of the challenges there are, but we need to find a middle ground as to what is a reasonable price for the consumer, while maintaining that demand while ensuring that producers receive a fair price.”
The landline contacted several of Australia’s largest supermarket buyers and processors.
A Woolworths spokesman told the ABC that it had held “collaborative talks about our price with our regular suppliers over the past six months, given the inflation-driven cost pressures.”
“We will continue to work closely with our suppliers to understand market variations and collaboratively manage industry-wide challenges,” they said.
Watch this story on your ABC TV landline at 12:30 on Sunday or on ABC iview.
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Posted 3 hours, 3 hours ago, Saturday, June 25, 2022 at 11:54 PM, updated 2 hours, 2 hours ago, Sunday, June 26, 2022 at 1:33 AM