By Clint Thompson
The recent spike in input costs has forced farmers to plead with their customers on renegotiating their current contracts. South Georgia vegetable farmer Jaime Patrick has implemented this strategy and seen mixed results.
“Especially on contract business that we have, year by year contracts or multiple year contracts, we’re having to go back now and say, ‘Hey, a year or two years ago, we never saw this coming. Who would have thought input costs would have been like this?’” Patrick said. “I think that’s one of the biggest challenges right now is trying to talk to our customers and say, ‘These input costs are killing us.’ We have to pass this on or else we won’t be a farmer. That’s what we worry about the most.”
Pallet prices ballooned earlier this year amid supply shortages. So did freight expenses amid driver shortages. Diesel prices have increased to $3.73 per gallon, an increase of $1.34 over the past year. Fertilizer prices have spiked as well.
“It’s not sustainable right now. In this current format, it’s not going to work for us.”
Reduced Production
The only recourse growers have is to ask for an increase in their crop’s price. Patrick expects some to reduce their production as well.
“I think what you’re going to see the farmers do here, we’re going to cut back. That’s our plan, make cutbacks to our contract business plus a small percentage to make sure you cover your contract,” Patrick said. “What we’re trying to push a lot of people to, lets start contracting this stuff for prices that we all can live with, where it’s not going to hurt the end consumer too much; it’s not going to hurt our customers much; but then it’s going to sustain our business, and we’re able to continue year after year.”