Tasmanian Country Article - 19th Aug 2022 - Collective negotiations dig deep for potato pricing

As featured in the Tasmanian Country publication 5th August 2022

In a challenging environment along the breadth of the supply chain, negotiations between TFGA Simplot Potato Negotiating Committee and Simplot Australia have resulted in a record price increase of 27 per cent ($105/t) for the 2022/23 season

At a well attended growers meeting held on the 3^rd of August 2022, the TFGA Simplot Potato Negotiating Committee presented the final offer to growers from Simplot Australia for the 2022/23 season. The offer, which totals a $105/tonne increase on last year’s price, was previously rejected by growers at a meeting held three weeks earlier.

A challenging environment

The TFGA Simplot Potato Negotiating Committee has been in talks with Simplot since June 2022 and this year’s negotiations were some of the toughest yet.

During the past two years potato growers have faced a plethora of challenges, including staggering increases in the costs of production; in the order of approximately 19 per cent. Soaring fertiliser and fuel prices have played a key role, however labour, electricity and land lease prices also have contributed significantly to these skyrocketing costs. Potatoes are one of the most expensive commodities to grow and every escalation in input costs further increases the overall risk profile of the crop.

In addition to increasing costs, extreme weather events, labour shortages and disease expose growers to even more risk.

Growers needed a large price increase this year, not only to recover the extra costs associated with growing a potato crop, but to remain profitable. While the $105/t offered by Simplot during the negations reflects a record 27 per cent rise on the 2021/22 price, the Committee acknowledges the offer still falls short of growers’ expectations this year.

Collective bargaining a useful tool

Despite not being able to reach an agreement this year, both Simplot and the Committee agree collective bargaining is the most effective method to ensure potato production remains a profitable option for growers and talks will resume again next year. The Committee, growers and Simplot will continue to work closely across a range of issues to support the long-term viability of the potato industry in Tasmania, through investment, research and innovation.

While unable to endorse the offer for the coming season, the Committee would like to acknowledge Simplot’s willingness to work with growers to understand their concerns. All stakeholders along the supply chain are operating in a challenging environment and have had to adapt in different ways during these unprecedented times. The offer Simplot has put on the table will alleviate a significant degree of the cost pressures growers are currently experiencing and growers are encouraged to assess how potatoes may fit within their operations for the coming season under the new pricing structure.

The TFGA thanks the members of the TFGA Simplot Potato Negotiating Committee, led by Leigh Elphinstone, and the broader Grower Committee for their hard work during recent months and for their commitment to the industry and fellow growers. TFGA also thanks all growers for their patience and strong support of the Committee throughout negotiations.

Hugh Christie
TFGA CEO