Simplot blames farmers for food services price rise

US POTATO processing giant Simplot has raised prices to retailers citing higher raw potato input costs and agricultural cost pressures.

TasFarmers Chief Operating Officer Neil Grose said Simplot’s hypocrisy has reached new levels, with a letter to their food services customers blaming a price rise on increased raw potato costs.

“Simplot has aggressively pushed prices down to Tasmanian farmers, yet seek to blame their own price increase on the very farmers they are driving to the wall,” Mr Grose said.

“Simplot has bullied Tasmanian family farmers into accepting a 2.5 per cent overall cut in their farm gate price, yet for them to now increase prices is almost incomprehensible.”

Mr Grose said he understood that most farmers had signed contracts.

Meanwhile, a prominent Tasmanian potato grower says he is considering not growing spuds in future years.

Mr Grose said that one of the farmers who did not sign the contract, who did not want to be named, was “a fairly large grower” who’s just not going to grow spuds”.

“This is an incredibly difficult situation for Tasmanian family farmers who grow spuds for Simplot,” Mr Grose said.

“While seeing a 2.5 per cent cut to the average price was hard enough, to lose their contract would be devastating to growers.

“Farmers are carrying higher fertiliser, fuel and production costs, yet they are being paid less. Simplot cannot use those same pressures to justify charging customers more while pushing family farmers closer to breaking point.

“Unfortunately, the price cut, and Simplot’s conduct through this process, shows they only have concern for their bottom line.

TasFarmers is calling on Simplot to pass on the price rise to growers, who are facing significant cost pressures of their own.

“Simplot has been caught out telling farmers one thing and their customers something else,” said Mr Grose.

Mr Grose said despite the cut to growers, the final product is now more expensive to buy at the supermarket and fast food outlets.

“McDonald’s, which has so far refused to speak with growers, has recently put the price of their fries up to $5.15, the farmer’s share of which has now dipped below 11 cents a serve.”

Tasmanian potato growers have a collective investment in Tasmania of over $1.8 billion, spanning farmland, machinery and other cropping infrastructure.

Mr Grose said that despite Simplot’s processing future in Australia relying on farmers continuing to invest, continual price cuts and rising costs could place that in jeopardy.

“Potato growing in Tasmania is an incredibly vital industry for the state.

“Cropping puts significant and much needed economic activity into our regional areas but cutting prices to farmers places the economic vitality of the whole state at risk.

“Short-term price cutting does nothing for the long-term prosperity of our agricultural sector – Tasmania’s farmers need a fairer deal.”

Simplot potato grower committee chairman Leigh Elphinstone said the processor had bypassed the negotiating committee.

Mr Elphinstone said he and other growers had no other option but to sign the contract.

“Potato growing isn’t something that you just decide one day that you are not going to grow.

“There’s a lot of planning that goes into organising seed and fertiliser.

“We’ve invested reasonably heavily into our machinery that is potato-specific.”

In future seasons, Mr Elphinstone said he might not grow potatoes.

“If this sort of behaviour continues by Simplot, I’m contemplating my position within the industry.

“Normally we would be looking at upgrading our potato harvester now, but that’s definitely not on the cards.

“I’m not investing any money into anything potato-specific.”

Mr Elphinstone also runs beef cattle at his property at Sisters Creek and said he would focus more heavily on that if he stepped away from potatoes.

He also said that many Tasmanian growers who supply potatoes to Simplot were feeling outraged.

“I’ve never talked to so many growers that are so upset, angry, and uncomfortable about having to sign a contract of intent.

“All growers seem to be the same – they are contemplating their future within the industry and what this is going to mean for the coming years.”

Simplot was contacted for comment but did not respond.