Home' Grower : July 2012 Contents The South Australian Grower -- July 2012
SA Potato Co senior business manager Anthony Chiera says although
the company only works with fresh produce markets, it is going "the
extra mile" to guard against import fallouts.
Quality product kicking goals
RISING production costs and lack
of a sustainable water supply are
major threats to the domestic
potato industry, according to senior
business manager at SA Potato
Co., Anthony Chiera.
"Cost-of-production continues to
rise dramatically for fertilisers,
diesel and freight costs. We need
to achieve a sustainable bin price
back to farm to cover all these
expenses and have enough left
over to pay for the next crop," he
With 34 per cent of national
production, SA is the biggest
producer of potatoes in the
country, and SA Potato Co has been
a big part of the State's success.
SA Potato Co was formed by
Vincenzo Raschella in 1999 to
complement his Fruitorama
business at the Adelaide Produce
Markets at Pooraka.
The business Mr Raschella
initiated an ongoing expansion
program to buy potato farms and
water licences throughout the
Southern Mallee district.
His sons Enzo and Tony have now
taken the reins, while Mr Chiera is
responsible for operations,
marketing, grower liaison and
The company has a packing plant
in the Adelaide Hills and delivers
freshly harvested potatoes in
Melbourne by 4am.
A range of farms throughout SA
and Victoria supply potatoes to the
group, but their biggest source by
far is the 12,141-hectare 'Peebinga'
primary farm, 245 kilometres from
the Adelaide Hills hub.
Mr Chiera says the cheap flood of
imported potatoes is not a concern
as the company only works with
fresh markets and does not have to
compete with overseas products.
Even so, overseas imports may
have encouraged interest in new
spud varieties, and this point has
not been lost on SA Potato Co.
A key part of the business model
is the promotion of new varieties.
Mr Chiera said the purple-tinted
Kestrel potato, in particular, was
enjoying strong market
Direct contact with customers
through sister company
Fruitorama's presence at the
Pooraka markets means the
company has their ear close to the
ground on changing consumer
"Fruitorama has been the key
marketing force and success of our
group. We're able to complement
our product range that extends
beyond washed potatoes -- which
includes onions, watermelons, and
pumpkins -- and this enables us to
offer our local greengrocers and
supermarkets a wide selection of
hard produce," Mr Chiera said.
-- MAX OPRAY
SOUTH Australia's potato industry
faces an uncertain future as it battles
cheap processed imports, increased
offshore competition and rising input
costs. LIZ COTTON reports.
SOUTH Australia is the nation's largest producer
of fresh potatoes and a significant contributor to
the processed market, recording an annual output
of 485,000 tonnes and employing more than 2000
In the South East alone, 300 people are working in
the industry that is worth $125 million after value-
The 18 SE potato growers produce about 130,000t
every year that end up as hot chips, fresh potatoes or
But this year, Australia will import 160,000t of cheap
frozen potato chips putting major processor McCains
under pressure, along with the region's potato growers,
some of whom earn as little as 60 cents from the sale of
a $5, 2-kilogram bag sold at supermarkets.
On those figures, some farmers have few options but
to plough potatoes back into the paddock or use them
as stock feed.
Thirty years ago, McCain's Safries factory at Penola
had 70 growers supplying about 60,000t of potatoes
annually and until recently, 15 growers supplied
130,000t, thanks to growing efficiencies and new tech-
Only 12 SE growers now supply McCains.
SE growers are facing a year of lower prices and
"Costs associated with fuel, fertiliser, power, water,
machinery, labour, vehicle registrations, tyres, mainte-
nance, council rates and a myriad government licences,
fees, levies and charges continue to rise and competi-
tion from offshore imports is also increasing,"
Mingbool potato farmer Terry Buckley said.
"For over a decade -- particularly so in the last few
years -- potatoes and potato chips have been imported
from New Zealand, Europe and the United States.
This has put companies such as McCains Foods under
a lot of pressure because we've got Australian growers
who aren't subsidised and who can't export, up against
heavily subsidised growers who don't have the high
cost- of-production that we do."
Mr Buckley said the problems facing McCains
and the SA potato industry were present in almost
every manufacturing industry around Australia.
"It is becoming increasingly hard to do business
here in Australia with the COP and the high of the
Australian dollar," he said.
"McCain's reaction is directly related to the
surge of cheap imports. While the supermarkets
started it off by bringing in cheaper imported
products and slashing the cost of home-grown sta-
ples, now there are other agents doing the same."
Mr Buckley also highlighted labour costs, in
which Australian farmers paid almost three times
that of their United States counterparts for on-
farm workers -- if they could find them.
Agriculture Minister Gail Gago said she was
aware of the challenges facing the industry with
McCains Foods cutting contracts.
"While I have no access to the details of commer-
cial negotiations between growers and processors,
I am aware that there are challenges facing the
industry to ensure quality and security of supply
are maintained," she said.
"PIRSA has worked extensively with the SE
Potato Growers Association and McCains Foods
in the last two years to address several cost produc-
tion issues, and SARDI has continued to work on
potato disease management techniques.
"In January, seven SE potato businesses partici-
pated in a benchmarking program to identify
160,000t of frozen potato chip imports this
Farmers forced to plough-back spud
Bad timing for budget cuts
Work together for a
more stable future
THE South Australian industry is reeling from the
shock resignation of Potatoes SA inaugural chief
executive officer Jonathan Eccles (pictured right).
He is leaving after only four months in the role,
citing personal reasons.
But Mr Eccles is on the front-foot about the
industry's predicament, saying "all players" --
including McCains Foods, the washer/packer arm,
growers and allied services -- must work on a
strategy for the future.
"I think the industry as a whole needs to look at
what direction it needs to take into the future," he
"In South Australia we have some of the most
efficient production systems but we need to
explore ways to become more efficient in growing
and processing potatoes in order to compete with
Mr Eccles said maintaining regional development
was important going forward.
"The potato industry is made up of much more
than just growers and processors. There are many
businesses such as fertiliser suppliers, machinery
sales, contractors and so on that are part of the
industry, so there is a real multiplier effect within
regional communities," he said.
Mr Eccles said while he was pleased with what
the organisation has been able to achieve, he
believed a lack of coordinated marketing and
promotion of the industry to consumers was a
"There is room for general promotion of the
health benefits, low-cost and versatility of
potatoes, as well as new varieties entering the
market," he said.
Imports pose major
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