Editor's Note: This is one in a series of articles Western Farm Press is publishing highlighting the activities of California Ag Leadership graduates.
I got my start in farming 11 years ago, marrying into a large production agriculture family from West Side of the San Joaquin Valley. Since that time, our business has grown to produce over 100,000 tons of processed tomatoes annually. In addition, I serve as the first vice chairman of the California Tomato Growers Association (CTGA) and am a Class 32 graduate of the California Agricultural Leadership Program.
When I started in the processed tomato business in 1994, times were relatively good. Statewide production for that year was up nearly 2 million tons, from 8.9 million tons in 1993 to 10.7 million tons in 1994. CTGA was negotiating nearly $2 more per ton from the previous year and hopes were high that those numbers would continue to rise. As with any complicated industry, though, there is constant change, and as CTGA would experience over the next decade, processed tomatoes were in for a bumpy ride.
As the primary bargaining unit for growers, CTGA is responsible for negotiating an equitable price per ton with processors on behalf of their members. In the past, with high capital investments needed to grow and harvest processed tomatoes, processors stuck to processing and growers to growing. However, with the influx of vertical integration and increased financing opportunities, the lines between the two became blurred. Growers began to process, processors began to provide services such as harvesting, and transplanting to growers thereby reducing the capital investment required to produce tomatoes for processing. These and other factors led to the steady decline in membership for the CTGA and the weakening of our ability to bargain for good prices.
Add to this changing business environment the fact that Americans were becoming increasingly infatuated with fad diets and the healthfulness of their food, and processed tomatoes took a beating. The processing capacity of our industry — which produced 95 percent of the processed tomato production in the United States in 2004 — can produce in excess of 10-15 percent of the annual demand for our products.
In the summer of 2003, the organization became pro-active. The CTGA hired consultants who specialized in bargaining and trade associations' performance and who approached our stakeholders about the situation. They contacted CTGA member growers, non-member growers, and processors to ask the question — of what value is the CTGA to you? Does the organization have good leadership? Is bargaining worth it?
More than $100,000 and three months later, we had some plain truths. Our organization needed to address its leadership, continue to bargain, and figure out how to increase demand, thereby removing the over-capacity of processing.
The first two were simple to resolve; the last finding is far more complicated and a much bigger challenge.
As farmers, we're used to challenges. The CTGA has adopted a more flexible bargaining philosophy - recognizing the fact that a member in Woodland may have different economic issues than a member in Five Points while delivering to different processors.
While our efforts are still in their infancy, the CTGA is working to increase support for a processed tomato promotional board — an entity designed to target consumers on the health and consumption benefits of processed tomatoes. This board would be made up of stakeholders from growers, branded processors, independent, and grower-owned plants. We hope to work with various research entities to generate easily comprehensible data validating the benefits of lycopene — an antioxidant in tomatoes that has been found to decrease the risk of cancer and heart disease.
Processed tomatoes are unique in that when a tomato is cooked, the lycopene is made more metabolically available. We are developing a Web site that highlights famous chefs and their processed tomato recipes, as well as cultivating media relationships to highlight both the culinary and health success of this product. This all focuses on the fact that processed tomatoes, and the products made from them, have unique and beneficial qualities. It is a great story that needs to be told the way other commodities — wine grapes and almonds come to mind - have leveraged positive health benefits into increased demand.
Each of these efforts, along with our plans to re-engage and energize our membership, is a step in the right direction. We may not turn a decade of decline around in a year, or even two, but I am confident that with commitment and cooperation from throughout our industry we'll succeed.