Roller coaster 2008 ends for processing tomatoes — uncertainty looms for 2009

California’s 2008 processing tomato harvest is winding down a season that has been characterized as about an average to nothing special year.

It started out on a decidedly brighter note with a cannery-firm $70 per ton grower contract last fall, a record price that was 11 percent more than last season and 40 percent more than in 2005.

Water availability issues, skyrocketing fuel and fertilizer costs, however, have taken more than just the shine off the crop. It may have relegated a crop, once considered a glamour crop, to one struggling to claim acreage in 2009.

Just a few years back growers fought to hold tomato contracts, even taking a little less than what they thought they should get to ensure they kept their contracts. They often made up differences with tonnage.

This season tomatoes have had to compete with crops that, 1. offered as much income without the risk or, 2. could be grown with less water and still be profitable. Crops like alfalfa, wheat and safflower pushed tomatoes aside this year and are expected to shove around the once big time field crop.

The California water crisis reached a level this season where growers abandoned or did not plant tomatoes to save water for trees and vines. California is in the second year of drought compounded by court rulings that limit water transfers from Northern to Southern California. Indications are it will only get worse next season, short of rain and snow of biblical proportions.

Fortunately, it has been a relatively trouble free 2008 for growers, according to Morning Star Packing Co. Pest Control Advisor Renee Rianda of Woodland, Calif.

“There really have not been any complaints about insect pests. Mold has not been an issue, but I suspect it will be as the days get shorter and the weather gets cooler,” she added.

“There were some heat issues this year which causes white specks inside the fruit. Heat delays coloring and always creates problems with harvest scheduling,” she added. High winds were also a problem early on, drying out soils and even blowing out some small plants.

Morning Star is the world’s largest tomato packer, contracting for 65,000 to 75,000 acres of canning tomatoes each year in the state or about a fourth of California’s production. It has California packing plants at Santa Nella, Los Banos and Williams.

Rianda primarily works closely with growers, pest control advisers and tomato product buyers validating production practices as part of the growing “sustainable” agriculture issue. She also works with growers on bonus quality issues as well as harvest scheduling.

“Buyers want to know what growers use; how they make production practice decisions and things like that. We get questionnaires from our buyers all the time and if we do not answer those questions, they will not buy,” she said. “A lot of it is common sense kinds of things, but we have to report everything that goes on in a field in today’s accountability and traceability environment.”

Most growers and PCAs understand the growing need for accountability. “We don’t want to burden just a few growers, and we try to be fair in collecting the information necessary,” she said.

Tomato shipments and sales have been good as consumers learn of the health benefits of tomato products. Global consumption is growing about 3 percent annually.

According to Morning Star’s economic reports, global inventories have not kept up with increasing demand.

California is benefiting from this increased worldwide demand, especially because of the weakening U.S. dollar.

Additionally, according to Morning Star, the price of EU tomato products, which make up a fourth of the world’s production, will be much higher in the near future.

All of this leads to additional export opportunities for the U.S. and other world suppliers like China.

California, which produces more than 90 percent of the processing tomatoes in the U.S., produces about 30 percent of the world’s supply.

This all brings to the forefront 2009 and what next season holds for the California processing tomato industry. It looks a bit precarious right now.

Grower prices will likely go higher than the $70 per ton, but how high is the question. There also could be a shift in production due to water issues.

The price range being bantered around among growers for 2009 is in the $90 to $100 per ton range, especially in the San Joaquin Valley where the water crisis will only get worse, short of a winter moisture miracle.

“We negotiated what we thought was a good 2008 price for growers. We were not anticipating everything changing with the water and cost of production like it did. We never anticipated fields being abandoned for a lack of water,” she said.

Rianda said it may even be difficult to get contracts from growers who farm south of the California Delta.

The water situation is perhaps the biggest question for next season. It may cause shifts in production areas. “We may have a better chance of getting more contracts in Northern California with the water situation,” she said. Growers there are likely to have a more certain supply of water north of the Delta which has been the focus of save-the-fish efforts spawned by radical environmentalists. Thousands of acre feet of water have already been blocked from moving through the Delta to the San Joaquin Valley to protect a minnow.

However, Rianda said that the competition for land across most all crops is just as fierce in Northern California as the rest of the state. One of the biggest land draws now is alfalfa. Corn is another and safflower still another.

Fortunately for the packers, landlords like tomatoes because of the income they generate, and that may help in keeping tomato acreage up in 2009, she added.

Tomatoes are making a bit of a comeback in Northern California. There has been a shift in the past to the southern part of the state where tonnages, color and solids tend to be higher.

This is slowly reversing itself. This year in Northern California, Rianda said tonnages have been comparable with southern San Joaquin Valley production.

“Growers in the Sacramento Valley are averaging 40 to 43 tons this year,” she said. An increase in NorCal yields is attributable to an increase in the use of drip irrigation to irrigate.

Rianda estimates that as many as 50 percent to 60 percent of the Sacramento Valley tomato fields are now irrigated with drip. It is likely higher than that in the southern production areas.

“Tomatoes may very well continue a comeback in Northern California in 2009 just because of the water availability issue. However, they will never return to what they were before. There are a lot of trees in ground here that used to be tomato fields.”

Dramatic changes are taking place in California agriculture at an unprecedented pace. Prices have never been higher for most commodities. Costs also are scaling record heights, and the uncertainty over cost and availability of water has never been greater.

The plight of the California processing tomato industry is different than other changes California agriculture has seen like the switch from cotton to alfalfa or grains, or even the transition from row crops to permanent crops. Most of California’s row crops are grown elsewhere in the U.S.; processing tomatoes are not.

California is the primary source for U.S. tomato products, producing about 11 million tons each year. They are obviously important to ethnic foods. Just say ketchup.

“Tomato products are used in far more products than you would imagine,” stated Rianda.

Without California production, the U.S. would have to rely heavily on other countries, primarily China, for its tomato paste and other products.

It is going to be a challenge for growers and packers to keep processing tomatoes in the mix.

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