Tasmanian potato growers are holding a rally in Deloraine today (Thursday) in response to contract negotiations with processor Simplot, which will see a 6% reduction in farm-gate prices for the 2026 harvest. Farmers say the cuts, combined with rising input costs, will reduce profits by an estimated 39%.

TasFarmers CEO Nathan Calman said the pressure on growers had intensified. “Simplot is indifferent at a global level. They don’t seem to care,” he said. “They want to drive down the price they pay for Tasmanian potatoes to match what they can source from India or China.”

The processor reported a net profit of US$49 million from its Australian operations last year, but management has refused to cover growers’ higher costs. Calman said some proposed contract models would cut farm-gate prices by as much as 32%, despite production costs of around US$14,000 per hectare.

Imports put further pressure on domestic growers. Frozen potato imports have quadrupled in seven years, reaching 188,339 tons in 2024, mostly from China and India, where production costs are lower. Indian supplier Hyfun Foods has recently signed a major distribution agreement with Woolworths for frozen chips and other potato products.

“The more produce that comes from overseas, the more pressure is placed on local producers,” Calman said. “That ultimately decreases the volume and price for Tasmanian growers [and] creates a threat to the nation’s food security.”

Farmers say the price pressure has not been reflected at the consumer level. A large serving of fries at McDonald’s costs about US$3.25, while Tasmanian growers receive only US$0.07 per kilo for the potatoes used.

Calman noted the long-term risks for the local industry. “Farmers might take a price cut and still grow potatoes, but then they can’t invest in new equipment or the servicing of tractors,” he said. “That means the local mechanic loses work. No one buys new machinery. Fast-forward five years, and everyone’s tractors are clapped out, no one can afford to reinvest, and the industry spirals downward until it collapses.”

Growers say they are heavily invested in land and equipment and cannot easily switch crops. TasFarmers expects up to 35 tractors at the Deloraine rally, which will take place at 1:30 pm.

Source: PulseTasmania