2014 was a record-breaking year on many fronts for the California processing tomato industry.
The industry produced the largest crop in California history at 14 million tons on 290,000 acres, record yields of 48.3 tons per acre, all-time high grower prices at $83 per ton, and record sales over 12 months totaling 13.9 million tons.
“This is all great news for the California processing tomato industry,” said Mike Montna, president and chief executive officer of the California Processing Tomato Growers Association (CTGA).
He shared these year-end statistics with CTGA grower members during the organization’s 68th annual meeting held in Modesto, Calif.
If those record-breaking figures were not enough, export sales of processing tomato products have more than doubled in the last six years. Montna says a large percentage of last year’s crop was exported, including a 25 percent increase in tomato paste sales abroad (about 3.5 million tons).
To further expand export growth, Montna told the crowd that tomato paste processors and CTGA are working together to remove the 14.4 percent tariff on U.S. paste imported into the European Union.
“We’ve been meeting with the lead negotiators at USDA and the congressional offices on this issue and have garnered their support,” Montna said. “The next 12 months will include fostering those relationships and moving forward.”
Record production in the middle of a drought
With so many processing tomato records shattered, how can this industry continue to produce so much in the middle of a drought? This query is the one Montna is asked the most often, he told the crowd.
He answered the question two ways.
Best return per acre foot
First, crop growers statewide must make tough choices each year on which crop could provide the greatest economic return per acre foot of available water. In some cases, processing tomatoes fit the bill.
Most water used in California agriculture during the current drought is groundwater since state and federal officials (and Mother Nature) have almost turned off the spigot for water for many farmers through zero to minimal allocations.
“This means putting the little water they have into the best money-generating crop,” Montna said.
“Last year, some growers were forced to change their cropping patterns due to the ongoing drought,” he explained. “This caused a lot of shifting and shuffling of acres throughout the planting season.”
Tomatoes currently offer a good revenue return if the grower has the water to dedicate to the crop. A recent University of California Cooperative Extension survey suggests the needed average water use is about 30.5 inches per acre annually.
Spreading overhead costs
Second, Montna pointed out the total impact of the drought on a farm’s entire acreage and across cropping systems.
“While the tomato side of the individual entity may have had a good year, the overall farming operation may not,” he explained.
With the drought, there is little a grower can do to reduce fixed overhead costs. This means spreading these overhead costs over fewer acres.
“This is a short term solution which cannot be sustained over the long term,” Montna said.
2015 crop forecast
Looking at the 2015 crop, Montna says negotiations are currently underway between CTGA and processors to set the grower price, which he says should be “fair and reasonable” given the factors impacting this year’s growing season.
“While I think we are making some progress in the negotiations, I think there is a little ways to go,” Montna said.
Looking at early 2015 tonnage projections, California tomato processors released initial production figures suggesting a 15 million ton crop, one ton over last year’s record production.
Montna says this would require an additional 20,000 acres of tomatoes.
The production figure has since been lowered to 14 million tons, tied to a strengthening of the U.S. dollar and its potential negative impact on growth in export markets.
In closing, Montna says much of what happens in California agriculture continues to be drought driven.
“We’re all learning the hard way that none of us really know when this drought will end,” he concluded.