Potato farmers are warning that growers will stroll away from the trade as price pressures make the staple crop unviable in Australia.
- WA’s “spud king” Tony Galati says supermarkets can decrease prices and nonetheless pay farmers extra
- Growers warn the trade dangers changing into unviable after years of stagnant pricing and mounting prices
- One farmer on WA’s south coast faces a dangerous finish to reap along with his farm’s revenue on the road
Unlike most greens, potatoes usually are not traded on wholesale markets that rise and fall with provide and demand.
Instead, they’re offered by farmers to corporations that wash and bundle them (washpackers) and set prices with supermarkets in a lot the identical method as dairy milk processors.
“It’s not likely a free market. The value does not actually go up or down for the farmer based mostly on demand or provide,” WA Seed Potato Producers president Julian Ackley stated.
“We’ll most likely see one other 5 to 10 per cent of what’s left of them drop out this season.”
The chips are down
Tony Galati is a potato grower, washpacker and retailer in WA by Spudshed.
“I’m a grower and a packer — I would not develop for a packer.”
He stated chain retailers may “completely” pay farmers extra and nonetheless make money, even when they lowered prices.
“When farmers had been getting 80 to 90 cents a kilo for potatoes, they had been about $4 on the grocery store. Now, they’re getting 40 to 50 cents a kilo and so they’re nonetheless about $4 on the grocery store — that money goes someplace.”
‘Corporate management’ looming
Mr Ackley warned that household farmers leaving the trade would get replaced by firms.
“I believe it’s going to return all the way down to extra large company growers controlling the trade.”
The WA potato trade was deregulated in 2016, inflicting prices to crash and noticed many farmers stroll away from the state.
For now, Julian Ackley has tough choices to make on his personal farm.
As a seed potato grower, he’s in a position to decide on what he expenses the farmers who purchase from him to develop recent potatoes.
“Trying to resolve what to cost for the seed this season may be very tough, as a result of I do know all my growers are actually struggling to get value for their product,” he stated.
However, his harvest has dragged on dangerously near winter and the profitability of his 12 months’s crop is in danger.
“We have a lot lower than 10 per cent [of the harvest] to go. Normally that may be a fast job, however with all the things so moist and heavy, it’s tough.
“We nonetheless have about $70,000 of potatoes sitting out right here which I’d wish to have, as a result of that is about the revenue margin.”