Tasmanian potato growers start ditching spuds after stalemate on price negotiations with potato processors

Potato processor Simplot Australia has refused to budge on its second price offer to Tasmanian farmers for their potato crop this season. Farmers met on Wednesday night to discuss the impasse with the company over what they say is an effort to be paid a fair price for the product they grow.

Farmers say the extra AUD 105 (about USD 72,500) a tonne the company put forward three weeks ago is still not enough to cover the cost of growing their crop this season, estimated to be about AUD 20,000 (about USD 13,800) a hectare.

John Williams, Farmer of north-east Tasmanian potato:
 

"They [Simplot] came back to the meeting last night, and they put it to the growers that it would be up to the growers whether they wanted to grow and how many they wanted to grow."

 Farmers told to take it or leave it

Mr Williams said it was important that farmers considered whether they wanted to accept the deal individually.

John Williams:

"It comes back to the individual growers to do their budgets and make sure they're really looking at what their real costs are to grow potatoes and make their own financial decision based on their business."

About 70 Simplot potato growers were at the meeting in Deloraine. They're all reassessing their future in potatoes. John Williams will be cutting back.

John Williams:
 

"We've already stated that we will cut 10 hectares off our contract. I haven't yet done the figures on where we are at the moment. I'm leaning towards cutting some more."

Seed potato growers hit a brick wall too

Long-time seed potato grower Brett Neale said it was time for processors to offer all growers a fair price that covers their growing costs.

Brett Neale, Long-time seed potato grower:
 

"From a seed point of view … all negotiations have stalled, and we're in the same boat as everyone else. Potato farmers have had a gut full of growing potatoes for nothing."

Costs have gone up for all potato growers and last year yields were down. Some expect a similar wet season in spring and crop problems, while some say it's not worth the risk.

Brett Neale:
 

"We are probably going to see tractor rallies, boycotts of McCain, Simplot, boycotts of fast food outlets."

"At the end of the day, the workers at McCain and Simplot haven't got a job unless we supply potatoes, so I think they should be jumping on board with us."

In a statement, Simplot said it collectively considered every cost its growers incurred.

Brett Neale:
 

"The offer we have put on the table has accounted for all these costs, including de-risking the growers' exposure within a volatile fertiliser market."

"This record new pricing agreement will not only cover all these costs but will also improve our growers' profit margin per hectare."

"In addition, we know that the previous season has been very tough for many of our growers, and that is why we have included a sign-on bonus as part of the agreement, which will assist growers financially as soon as the agreement takes effect."

Simplot says its take out of Wednesday night's meeting was that many growers supported the deal and that Simplot should now proceed to engage growers on volume commitments for the season.
 McCain Foods in price talks as well

Simplot contracts about 140 potato growers in Tasmania, while frozen French fry manufacturer McCain Food Service is also negotiating a new price with its 70 growers. It's looking to contract around 100,000 tonnes this season.

Last year the total Tasmanian potato production was 457,000 tonnes. McCain and Simplot process potatoes into frozen potato chips for food service and retail.