As grocery prices rose and major supermarkets made billion-dollar profits last year, one of Australia’s most generous farmers lost $9 million — and he is now considering whether rock-bottom ‘1978’ prices will force him to leave the industry he loves.
Trevor Cross spoke out after Queensland Premier Steven Miles announced he had written to Coles, Woolworths, IGA and Aldi, asking their chief executives for a meeting to explain “why the gap between what farmers get for their produce and what customers pay at the checkout is getting wider”.
On their farm in Bundaberg, Mr Cross and his wife Wendy grow zucchinis, melons, pumpkins, tomatoes, snow peas, green beans, cabbages, macadamias and sorghum, as well as raising cattle and keeping bees.
In 2021, they both received Order of Australia honours for donating thousands of tonnes of produce to food charities.
Mr Cross agrees with calls by the federal Opposition for an Australian Competition and Consumer Commission (ACCC) inquiry into alleged price gouging by supermarkets.
Woolworths made a total net profit after tax of $1.62 billion in 2023, and Coles made $1.1 billion.
“There should be an inquiry [into] why food is so dear, when actually we dump more than we’re selling at the moment,” Mr Cross said.
“Some of the prices recorded [recently paid to farmers], they were comparing them to 1978.”
2000 tonnes of pumpkins dumped
Mr Cross said 350 people relied on Cross Family Farms directly for employment and hundreds of other jobs were indirectly supported by his business, in the transport, horticulture and nursery industries.
“[Supermarkets] should just give us some money to do what we do so we can survive, and they shouldn’t be gouging the customer at the other end,” he said.
Mr Cross said he was forced to dump 2000 tonnes of pumpkins last year.
“[Yet] it’s too dear for people to buy [in the supermarkets]; a pumpkin was costing about $20 and for that same pumpkin we couldn’t get $1.50 and then we had to do all the work to grow it,” he said.
Mr Cross, who does not supply directly to supermarkets, said all farmers needed was transparency and a fair deal.
After 35 years of building his business, last year’s $9 million loss forced him to borrow more from the banks to survive.
“We’ll know after six months what happens, whether we just shut up and get out because you can only borrow so much money – and we’re not alone.”
Senate inquiry starts next month
In December last year, the Greens secured cross-party support to set up a Senate review of the Food and Grocery Code of Conduct.
Federal agriculture minister Murray Watt told journalists it should “lift the level of transparency from supermarkets about the prices they’re paying farmers”.
“All Australians expect the big supermarket chains to pay our farmers a fair price and I think in too many instances that’s not occurring,” he said.
Queensland Fruit and Vegetable Growers (Growcom) chief executive Rachel Chambers said the industry’s supply chain was in jeopardy, but she was excited to witness a collective voice taking the issue seriously.
“While supermarkets aren’t solely to blame, they undeniably play a substantial role in the challenges our growers face. They are one part of a very complex puzzle,” Ms Chambers said.
“Growers have been afraid to speak up about the issues for many years, fearing retribution, however now it’s out in the open we can all have a conversation about the practices used by retailers.”
Exports increase
Instead of dealing with Coles and Woolworths, Daintree Fresh Far North Queensland farmer Shaun Jackson now sends 80 per cent of his produce – some 200,000 boxes of melons – overseas.
Mr Jackson said his cost of production for a box of melons was $14, but supermarkets were only willing to pay him $12 to $14 a box – and he still had to cover transportation costs.
“For that, it costs me $4 per box to get the product on a truck to Brisbane,” he said.
Federal shadow agriculture minister David Littleproud said the expertise of the ACCC was needed, and reiterated his November 2023 call for an inquiry by the commission.
“The supermarkets are treating Australian customers and farmers as mugs – we saw in June when cattle and sheep prices fell off a cliff, 60 to 70 per cent, we’ve only seen an 8 per cent reduction [in the price of meat] at the check-out,” the Nationals leader said.
“And then we look at horticulture, look at zucchini, they’re paying $2.20 a kilogram but charging $6.50 at the check-out; watermelons, they’re paying $1.50 a kilogram but charging $5.30. They’re cleaning up.
“We’ll be relying on food from overseas because our farmers can’t deal with the supermarkets that control 74 per cent of the grocery market.”
Energy, logistics, packaging costs blamed
A Woolworths spokesperson said most of its fruit and vegetables were sourced directly from suppliers, rather than through wholesale markets, and that a price was agreed before products changed hands, providing certainty and transparency to growers.
Prices were determined on weather, seasonality, supply and demand, the spokesperson said.
“We’re always working to strike the right balance to ensure our customers have access to high quality and affordable fresh produce, while also ensuring our suppliers receive a fair market price,” they said.
Like Woolworths, a Coles spokesperson welcomed the opportunity to meet with the Queensland Premier to “engage in an informed discussion on the factors that influence prices customers see at the check-out”.
“These factors include a range of costs such as construction costs, energy prices, logistics and packaging costs, as well as inflationary pressures,” the spokesperson said.
“We highly value our partnerships with Australian farmers from around the country, which allow us to bring customers quality produce every day. Many of our relationships are multi-generational and, in some cases, extend well over 50 years.”
An Aldi spokesperson said the company knew that the cost of living was a concern for many Australians, “which is why we want to assure our customers that we remain committed to offering the highest quality groceries at affordable prices”, while providing fair pricing for suppliers.
“We’re keenly aware that our low-price value proposition is only possible through maintaining the strength of our ongoing partnership with our extensive network of Australian supplier partners, who share our ambition to deliver exceptional quality to customers.”
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We know that distribution costs have risen but every time I see a “special” label on fresh fruit or vegetables at Wooolies or Coles I think ‘another farmer has been ripped off.’ The only time we see meat on special is when its use by date is due.