In a normal summer, potato grower Robert Cerchiaro would heavily push his produce to supermarkets and offer discounts to bolster sales, but record rainfall in 2022 that saturated his land means he is cutting back promotions to keep up with regular orders.
The general manager of Gippsland-based Red Gem Growers, which farms about 3000 acres through NSW and Victoria and supplies supermarkets including Coles and Aldi, expects his yield in the first three months of the year could be 25 per cent lower than usual.
Looking at the company’s NSW operations, Mr Cerchiaro says the crop now being harvested is down 50 per cent.
He warns that after a year of widespread flooding it is “crunch time” for the roast dinner and pub meal staple. For consumers, that will mean no cheap chips and maybe a fresh rise in prices.
“Now this is the crunch time – when you start getting into your summer crops and they’re just not what you’d hoped for them,” he said. “You’ve then got to reset and you’ve got to sell what you’ve got.”
Wild weather has smashed the $800 million potato growing industry, which produced 1.5 million tonnes in 2020-21. The bulk of production is centred in South Australia, Tasmania, NSW and Victoria.
The industry is divided into processed, which supplies spuds that get turned into crisps and fries, and fresh categories. The most acute shortage has been in processed potatoes, according to industry body AUSVEG.
“What that means for consumers is that there may be some time where there is a bit of a reduced availability of those potatoes going through the market,” spokesman Shaun Lindhe said. “And that might mean that there’s some gaps in supply for some products for the next couple of months.
“It’s been really wet in a lot of key growing regions. And that’s led to a drop in the amount of product making its way off farm.”
Major supermarket Coles has put in place temporary limits of two frozen potato products per purchase.
For Red Gem Growers, which sells about 20,000 tonnes of fresh spuds annually, the lead-up to Christmas produced “really good” sales as warnings of a hot chip shortage first emerged and the company picked up the slack where industry rivals had started to struggle.
But now Mr Cerchiaro is facing his own supply issues.
“We won’t be pushing the category to try and sell more because the volumes just won’t be there,” he said.
“There will be some pressures,” he said, adding this waslikely to mean fewer supermarket price promotions “because that drives a lot of the volume”.
Mr Cerchiaro said 2023 would be a difficult year for the industry. “Volumes will be down,” he said. “And you can’t change that until you plant again in January, February, [and] until you see your winter crops come through.
“Typically, the processing industry would take some stock from the fresh market to try and make up their deficit, but that’s not going to happen. And the fresh can’t take from processing. So therefore I think, generally, there will be … less volume.”
The price of supermarket potatoes has already been inflated by rising input costs, meaning any price pressure due to supply issues is unlikely to be keenly felt by shoppers, Mr Cerchiaro said.
“We’re already having to sell potatoes at higher prices to recoup all these extra costs where possible.
“We’ve got the perfect storm, haven’t we? We’ve got record high supply chain costs. And we’ve had record weather events around the country.”
Extracted from AFR