Tasmanian growers urge McCain Foods to raise potato prices 10 per cent

Scottsdale farmers Jerrod and Susan Nichols are preparing to plant their 2016 spring crops, but say processing potatoes for McCain would not be in the mix unless prices lifted.

Jerrod Nichols:
 

"What we're asking for price-wise is not something McCain haven't paid before."

"We believe this year there's no better chance to try and get some profitability back into growing potatoes for McCain."

"The dollar, we're all aware of where it's at, [and] the threat of imports is no longer there."

"The price that they're returning is solid, the demand for the product is solid, yet they're still using every trick in the book to try and keep things suppressed."

Mr Nichols is one of a group of Tasmanian potato farmers who supply processor McCain, and have called for a $30 per tonne price rise this year.

It is the first time the farmers have spoken out since McCain cut prices and ended collective bargaining in 2012 and closed two Australian factories (Penola, Smithton vegetable plant in 2009).

Jerrod Nichols:
 

"I've sat down with other guys and we believe that nobody can grow potatoes for under $14,000 a hectare."

"Our cost here was $15,000 [AUD per hectare].

"For what you're outlaying to grow a crop of potatoes, it's just not enough return."

"You know the gross margin is just not there."

McCain said it increased its potato price in Tasmania in line with the CPI to $307 per tonne.

Agricultural director John Jackson said the company was working with growers to increase their productivity, but that the Tasmanian operation had almost contracted its targeted tonnage for 2017.

Mr Jackson said he understood some growers would choose not to supply potatoes to McCain this year because their costs of production and transport to the Smithton factory were high.

He said European processed potato imports cost about two thirds of the Australian price per tonne according to Ausveg's latest data.

John Jackson, Agricultural director McCain Foods:
 

"Ausveg represent all processed growers in Australia and clearly states that in the first quarter of 2016 frozen imports increased a staggering 37 per cent."

"The numbers don't lie. That's the situation."