Farmers warn profits could collapse by nearly 40% as supermarkets shift to cheaper foreign supply.
Tasmania’s potato industry is entering precarious terrain as multinational processors slash the farm-gate price for 2026 spuds, while at the same time bulk potato imports from low-cost countries rise sharply. The shift has local growers warning that Australia may be losing its capacity to produce staple potato products, as Laurissa Smith and Meg Fergusson report in a news story published by ABC News.
Farmers say it costs about $22,000 to grow a hectare of potatoes for chips. The price covers wages, electricity, water, fertiliser and freight. During price negotiations this year, farmers asked Simplot to meet the increase in costs from the previous season.
Over recent years, Simplot Australia has agreed to this model, but a new US-based management team has ditched this arrangement. In recent price negotiations, Simplot’s Australian arm offered growers a 6 % cut in price. That, paired with rising input costs, translates into a projected 39 % decline in growers’ profits year over year. Many farmers say the cut came without meaningful negotiation; some are now facing the 2025 planting season without forward contracts.
The pressure isn’t coming from within Australia alone. Over the past seven years, the volume of frozen potato imports from India and China into Australia has reportedly quadrupled, reaching about 100,000 tonnes. Major supermarket chains are increasingly sourcing processed potato products from overseas processors; for example, Hyfun Foods (India) recently inked a deal to sell fries under a “Your Spud Co” label through Woolworths.
Growers argue the playing field is being tilted against them. A Tasmanian farmer, Matt Ryan, warned that options for farmers to “pivot” are thin: “Most of us don’t have an opportunity to pivot and do something else … we’re heavily committed.” He further cautioned that displacing local processing for short-term cost savings may threaten Australia’s food security in the long run.
Simplot, in a public statement, defended its new pricing policy, pointing to the increased import competition and saying the previous cost model “was appropriate for a time when international potato imports were less prevalent.” The company says it continues to engage growers in dialogue.
In 2022–23, Tasmania’s processed potato sector generated an estimated AUD $431 million in value. Some growers see the recent developments as a turning point — if domestic processing is eroded, they fear Australia may become dependent on imports for its fries, hash browns, and chip products.
Source: ABC News. This is a summary – read the full original article here
Image: Consumers continue to pay top prices for processed potatoes, while local growers fight for “fair” pay. Credit ABC News/Laurissa Smith
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