Woolies, Coles demand spur Simplot's processing plant volumes

The low dollar is keeping  vegetable producers in the profit loop and with added local demand from the big supermarkets, including Woolies and Coles, the industry is staying viable and expanding.

It is has been under threat from New Zealand based processors using imported Chinese vegetables and reselling them to Australia as products of New Zealand, angering peak body AusVeg.

The Land understands that Simplot’s corn processing plant at Bathurst, the home of its famous Chiko roll, is doing record volumes and even looking to exports.

Asked about the future of the Kelso plant, the company said: “Bathurst is running as usual.  As you would appreciate there is always a  topline review of operations to ensure maximum efficiencies are achieved in order to meet growth and ensure operations are sustainable for the future.”

Only in April this year the NSW Government announced major payroll concessions ($12m) for Simplot that helped preserve 100 jobs. 

Corngrowers in central NSW depend on Simplot and are keen to lock in contracts, which the company prefers. Springfield corngrower Jeff McSpedden is one contracted grower. He said vegetable security concerns in Europe had helped push up demand for Australian products, especially in the major supermarkets. He will get an extra $25 a tonne over the next three years having locked in a contract.

Mr McSpedden saw no signs of any change at Bathurst.  “As far as i know they are doing a record corn volume and production is powering along,” he said.

Cowra beetroot farmer Ed Fagan, Mulyan, said growers would survive as long as the dollar was low. Energy and labour costs remained high compared to overseas.

AUSVEG chief James Whiteside said ensuring Australia had an active and profitable vegetable processing industry was  important.

“Australia’s high costs of production, particularly its high costs of labour, water and energy, significantly impact this competitiveness,” Mr Whiteside said. “Currently product can be imported into New Zealand from China and then re-exported to Australia with a ‘Product of New Zealand’ label. Not only does this put  growers at a financial disadvantage, as product can be grown in China for a fraction of the cost, but it misleads consumers and potentially puts their health and well-being at risk as imported products do not necessarily adhere to the same strict levels of food safety protocols that local food producers are required to meet.”

Related:  Carrots lead as veggie exports surge

Ausveg released new figures and insights into vegetable exports last week with glowing figures for the past year. Ausveg reported the value and volume of fresh Australian vegetable exports increased in 2017/18, following strong trading conditions in key export markets in Asia and the Middle East. 

Increased demand for Australian-grown vegetables in the region and increased activities and investment in securing the exporting capabilities of the industry’s growers have also contributed to the positive figures.  

The value of fresh Australian vegetable exports increased by three per cent to $262.4 million in 2017/18. 

Over the same period, the volume of fresh vegetable exports also increased by 9pc to 208,000 tonnes.

Ausveg national manager – export development, Michael Coote, said the whole vegetable category was averaging 10pc year-on-year growth over the past three years. 

“Carrots are the number one traded fresh vegetable commodity by both volume and value, with steady year-on-year growth over a sustained period of time indicating that demand for Australian carrots remains strong,” Mr Coote said.

“Over 85pc of Australia's fresh vegetable export volume is comprised of carrots, potatoes and onions. 

"However, we still see positive growth in some other categories, including asparagus, which despite only comprising 2pc of fresh vegetable exports by volume, make up 11pc of fresh vegetable export trade by value and are the second highest value fresh vegetable commodity at $28 million.”