The 200 potato growers who supply Simplot Australia’s Ulverstone factory have negotiated an “out of hours” $20 per tonne price increase for this season that will flow through into 2011/12.
The price increase for growers follows January’s devastating floods that reduced the volume and quality of the crop and caused the growers’ negotiator, the Tasmanian Farmers and Graziers Association’s Simplot processed potato committee, to revisit last October’s contract with Simplot.
The committee has accepted the new offer on growers’ behalf. Chairman Trevor Hall said growers appreciated the increase for this current season and next season
“Growers now have the opportunity to plan ahead and we see this as a morale booster for growers and big positive for the Tasmanian potato industry,” he said.
In October the growers reluctantly accepted a price cut from Simplot of $25, which translated to a return of less than $300 a tonne, which, for most of them, barely covered the cost of production.
Under the new price agreement, in this current season Simplot will pay an additional $20 per tonne on the base price for all potatoes that are delivered and $50 a tonne for those that a farmer had contracted to deliver but was unable to do so, the so-called “lost tonnes”. The company also agreed not to penalise undersized potatoes unless they were unsuitable for processing.
For next season (2011/12), the parties agreed that a further $20 per tonne be added to the base price, i.e. an additional $40 per tonne on the original 2010/2011 contract.
Mr Hall said Simplot would be looking to contract the same tonnage for next year.
Trevor Hall
