The NFF Horticulture Council has issued an open letter to major supermarket chains in Australia, urging a timely response to price increase requests from fresh produce suppliers as fuel and freight costs continue to rise.
Fuel prices, levies, and transport surcharges are increasing, in some cases daily. For a sector dependent on refrigerated, long-distance freight, these changes are placing pressure on growers and suppliers.
The Council stated that acceptance of cost-reflective price adjustments is required to maintain supply and support future production. "Supermarkets are critical partners in the fresh produce supply chain. How they respond to these cost pressures now will directly influence whether growers have the confidence to keep planting, investing, and producing for the future," said Jolyon Burnett.
Queensland Fruit & Vegetable Growers CEO Scott Kompo-Harms said freight surcharges have increased, particularly for growers located further from capital city markets. "We're hearing fuel surcharges of up to 65 percent of the value of the consignment being applied on top of existing freight costs for growers in Far North Queensland. This increase blows out of the water the already thin margins for fresh produce growers," he said.
The Council noted that uncertainty around cost recovery is influencing decisions at the farm level, with some growers delaying or reducing production. Peter Spackman said fuel availability is also affecting operations. "We are aware growers, with no prospect of being supplied by their regular distributor, are currently running into the outskirts of Perth daily looking for diesel to run pumps and irrigation, among other things. It's no way to run a business and makes it easy to understand why growers are reconsidering plans for putting more seedlings in the ground," he said.
The Council stated that retailers have a role in supporting supply chain stability and domestic production. It also raised the importance of good faith trading practices, including accurate forecasts, fair negotiations, and recognition of supplier costs. "Good faith dealing means accurate forecasts, fair negotiations and recognising the real costs being borne by suppliers," Burnett said.
The same conditions are affecting the nursery sector, with similar requests directed to Bunnings. Sean Cole said growers are also facing increased production and transport costs. "Greenlife growers of any scale need to deal with Bunnings as the dominant retailer of its products to the public. The extent to which Bunnings supports its suppliers through the current crisis will for many growers determine whether they're still in business once fuel prices and supply normalise," he said.
The Council stated that retailers play a role in maintaining supply chains and supporting access to fresh produce and plants. "We all share an interest in a resilient horticulture sector," Burnett said. "Supporting growers through periods of acute cost pressure is not only fair, but also essential to safeguarding the nation's food security."
To read the full letter, click here.
For more information:
NFF
Tel: +61 (0) 2 6269 5666
Email: [email protected]
www.nff.org.au
