Peanut butter giant Bega Foods says it will cut the price it pays for Australian peanuts due to the availability of cheap foreign imports.
In a statement, executive general manager Adam McNamara said the drop was necessary to ensure the industry was competitive, but growers fear it could make it harder for consumers to buy Australian-grown.
For 40 years Far North Queensland grower Paul Ciranni has planted about 162 hectares of the legume on his farm at Atherton.
"To hear that they go in the shop and buy the cheap peanuts off the shelf is a bit hard to stomach," he said.
"It's a bit hard to swallow, because everyone that I speak to wants to buy Australian-grown or Australian-made."
Bega did not respond when asked if the reduction in prices paid to farmers would be reflected in the retail price paid by consumers.
Mr Ciranni said he told the company's agronomist he would not be planting any peanuts after being offered $100 a tonne less than last year for the next season.
"When she rang me I said I probably won't put any in," he said.
"Just on the amount of peanuts delivered to Bega this year we'd be out of pocket $30,000.
"They didn't give us any real indication on how we could retrieve our money … we can't get any more efficient than what we already are.
"The price of fuel and chemical hasn't come down.
"We asked if the drying charges were going to come down and their response was no."
Argentinian nuts land in Australia
Tony Russo has been featured in the company's marketing campaign promoting the peanut butter made from the produce he grows near Childers, south of Bundaberg.
He said there was a disconnect between the marketing of premium-quality peanut products and the price the company was offering farmers.
"We want to see those labels say 'made 100 per cent in Australia'," he said.
"I think the consumers will have a look at that and think, 'Hey, what's going on here with Bega and their products?'"
Two shipments of Argentinian peanuts that could not reach their intended port due to the war in Ukraine had been redirected to Australia, which Mr Russo said added to the pressure on the industry.
"It goes against the ethos of what Bega was trying to tell us," he said.
"Their philosophy was line of sight, so that they could identify how these peanuts were grown and what chemicals were used so that when they took it to the marketplace it was a healthy, sustainable, nut that they were trying to sell.
"We're getting these peanuts coming into Australia from Argentina — we don't know what they've been sprayed with."
About 70 per cent of the peanuts eaten in Australia are imported, which Bega Foods said it wanted to change when it acquired the Peanut Company of Australia in 2017.
Since then, Mr McNamara said contract prices to growers had increased by more than 18 per cent.
'Prime position' at risk
After years of encouraging farmers to plant more peanuts, Mr Russo said the price drop was difficult to comprehend.
"With Bega behind them … we saw a significant increase in the price of peanuts returned to the farmers," he said.
"It made it really viable to grow again.
"I invested in the industry because I could see a sustainable future in it.
"It's a long game that the farmers are playing — I think it's short-sighted game that Bega is playing.
"When the world comes back to normality I suspect we'll be looking for more peanuts here in Australia and we may lose some growers in that interim period."
In August, Bega Foods shares soared 12 per cent off a record-breaking $3 billion revenue result, which also outlined a 69-per-cent drop in statutory profits and estimated the pandemic cost the company $40 million.
Mr McNamara said the company was committed to Australian peanuts, but Bega Foods did not respond to further requests for details about the impact of the imported nuts or how they were used.
Mr Russo said growing peanuts in-between his sugar cane crops was his preference and that it would be a shame to see growers switch to other legumes like soy beans.
"We're in a prime position here to grow good peanuts," he said.
"All we're asking for is that Bega are mindful of the growers and support them wholly."
NT peanut plans crushed
The Northern Territory's only commercial peanut farm will not be planting another crop this year.
Located near Ali Curung, 350 kilometres north of Alice Springs, the farm has been expanding its peanut operation since 2020.
But manager Paul McLaughlin said the flood of cheap imports meant the NT's emerging peanut industry was now on hold.
"We've invested a lot of money and built a processing plant here," he said.
"But with the increased costs of diesel and fertiliser, and now we're going to get paid less for our peanuts, it's just not a viable option."
Mr McLaughlin hoped Argentinian imports would be short-term, but in the meantime he was now considering other crops.
