Australian potato growers are warning of deep financial strain after processor Simplot cut contract prices for the 2026 season, despite rising production costs and growing competition from imports.

Tasmania, the country’s largest potato-growing state, supplies most of its crop to Simplot’s Ulverstone factory, where potatoes are processed into frozen fries and other products. Farmers estimate it costs about US$14,150 to grow a hectare of processing potatoes, with expenses covering wages, electricity, water, fertiliser and freight.

Growers say they had expected the company to adjust 2026 prices in line with inflation, as in previous years. Instead, Simplot has reduced the rate by 6 per cent, a move farmers calculate would shrink profits by nearly 40 per cent.

Tasmanian grower Matt Ryan said talks with the company had broken down. “Unfortunately, the lack of negotiation has dragged on for so long that growers have absolutely no idea where they’re heading other than suck it up, take it or leave it,” he said.

Simplot Australia, which reported a net profit of US$49 million last year, defended its position. A company spokesperson said: “The previous cost model, which has guided negotiations in recent years, was appropriate for a time when international potato imports were less prevalent. However, the potato landscape has shifted significantly, with increased competition from overseas markets.” The spokesperson added that Simplot remained committed to dialogue with growers.

Imports of frozen chips and potato products are rising sharply. Simplot has told farmers that shipments from China and India have quadrupled in seven years to 100,000 tons. National trade data shows that 188,339 tons of frozen potatoes entered Australia in the year to June 2024. The company has also indicated it could increase supply from its processing plant in Gujarat, India.

Competition from Indian producers is already evident. In late 2023, Hyfun Foods signed a deal with Woolworths to distribute potato products across 1,000 stores under the “Your Spud Co” brand. The Potato Processing Association of Australia has warned: “Emerging markets in China and India are increasingly becoming potential threats as improvements in their quality standards may challenge our competitive advantage.”

Australia’s major fast-food chains have faced questions about sourcing. McDonald’s confirmed it purchased 134 million kilograms of potatoes in 2024, all from farms in Victoria and Tasmania. KFC said its potatoes “generally” came from the same states, while Hungry Jack’s declined to comment.

While supermarkets are required to label imported frozen potatoes, industry representatives say transparency in the fast-food sector is less clear, leaving growers increasingly exposed to price pressure as imports gain ground.