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Processed tomato prices will rise slightly in 2002

Unseasonably hot weather in May has California tomato producers seeing red after the fall harvest.

October 17, 2001

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Record high temperatures—including four 100-plus-F readings days in a row—were blamed for an estimated 7 loss of the 2001 crop.

Prior to May, the California Tomato Growers Association (CTGA), based in Stockton, Calif., predicted the 2001 crop would weigh in at 9.2 million tons. But following the brief heat wave, that estimate was reduced to 8.6 million tons.

Cost to producers—including growers, packers and manufacturers—is expected to be $25 million. But due to large canned tomato inventories in warehouses, pizzeria operators likely won't suffer large price increases in 2002.

Seasons' cycles

To ensure packers receive a scheduled, steady stream of ripe tomatoes at their factories, tomato planting in California begins in February, is staggered through March and April, and then finished in May. A 100-day harvest follows from July to September.

The staggered schedule allowed this spring's high heat to damage tomato plants at every growth stage, making accurate damage predictions difficult.

"We knew were going to have some production problems, but we didn't want to cry wolf early in the year," said John Welty, executive vice president of CTGA. "We started off estimating on a conservative basis, guessing a 3 to 5 percent loss. But by August, people were talking 10 percent."

Fortunately such dire predictions weren't realized, but Welty noted that even a 7 percent loss is significant to a community operating within already-tight margins.

"This kind of a shortage is enough to move many growers into the red," Welty added.

When those products make to market, prices are more likely to blip than spike. Welty estimates that packers have some 2.5 million tons of canned tomato product—whole fruit, diced, strips, filets and paste—warehoused. Such inventory is amassed to ensure both year-round supply and provide a cushion when harvests aren't optimal.

Reduced harvests have driven up prices in the past. A September deluge claimed 5 percent of the California crop in 1989, and in 1998, El Niño claimed a similar-size share. T make matters worse, Welty said canned reserves weren't as ample in those years compared to now.

The price is what?

This year Welty estimates case prices will rise only as much as 50 cents.

"If you look back in July and August, the crop was a couple of weeks behind," said Dan Milazzo, product manager for Escalon Premier Brands. He pointed out that running late causes overlaps in the harvest schedule. "Chances are good that you're not going to be able to take in all those tomatoes ... (and) that meant there were more green and yellow tomatoes coming in."

Hand sorting, he explained, is the best way to remove poor-quality fruit, but that not every packer will spend the money on labor to do that.

As variances in grape harvests affect wine vintages year to year, does the same hold true for tomato harvests? It can, said Milazzo, but packers and producers are skilled at compensating for taste differences found in each crop. Sauces and pastes are tasted multiple times each day during production and typically compared to the prior year's "run." Peters said removing product variance is a mark of high quality.

"Our jobs are to take the curves out of road and smooth out the process for operators," said Peters. "If we're doing that right, they shouldn't be able tell difference."

• California acreage devoted to tomato production: 275,000 avg.
• Growers: 350, approx.
• Total tonnage harvested in 2001: 8.6 million est.
• Value of 2001 crop: $416 million, est.
• Per-case price jump in 2002: 50 cents to $1, est.
• Most recent poor harvests: 1998 and 1989
• Shelf life of canned tomato products: 18 months
• Canned tomatoes currently warehoused: 2.5 million tons, est.
• California produces 95 percent of America's tomato crop, and 40 percent of the world's crop
• On average, a one-acre tomato field yields 35 tons of fruit
• About 70 percent of the total crop is made into paste
• Six pounds of tomatoes yield just one pound of paste.