Spud growers reject low price offer

Simplot potato growers are “disappointed and frustrated” that the processor has repeated last year’s tactic of low-balling the price paid for its potato supply.

Yesterday the Simplot Potato Growers Committee outlined an average of a four percent price cut to farmers which was unanimously rejected.

Committee chair Leigh Elphinstone said that it had been negotiating with Simplot over the past few months and was disappointed with the offer put on the table given the projected cost of production had risen by 6.5 percent.

The negotiating committee has gone back to Simplot with a counter offer of maintaining the previous gross margin per ha of $8000, despite the increased growers’ costs, meaning their income will still be reduced to $5275 before overheads are taken out such as rates and insurance.

“We didn’t think for a minute that it would be palatable with growers when once again they have chosen to not honour the gross margin agreement that had been serving us well for years,” Mr Elphinstone said.

“Simplot justified the offer based on a global oversupply of spuds but farmers reiterated that input costs had continued to climb.”

Simplot also outlined a wider variance of prices paid across varieties, ranging from a cut of 2.5 to 10 percent.

“While there has always been a slight difference in some varieties this is extreme with that gap based on the projected yield of the new varieties,” Mr Elphinstone said.

“This last harvest season has been average to slightly above average and the new varieties of Barossa and Clearwater, which should be easier to grow than the traditional Russell Burbank, are showing promise, but it's too early yet to be making those assumptions.”

Last year's price negotiations deteriorated into a farmer protest tractor rally through the main street of Deloraine before an agreement was reached.

The committee is waiting on a response and a meeting with Simplot within the next week.