California’s 2009 processing tomato crop will long be remembered as a bin buster that could have been even larger.
It ended at a record 13.3 million tons harvested from 308,000 planted acres with a record average yield of 43.2 tons per acre. It could have reached the 13.5 million tons that the USDA forecast in the fall, had California not been drenched from a mid-October Pacific storm that ended the tomato harvest instantly.
The euphoria of documented field yields of 70, 80 and even one Kings County grower’s 93 tons per acre were tempered by the crush on processors who jumped from field to field gathering contracted tonnage — leaving behind unharvested, uncontracted tonnage.
Some of that was sold to processors for as little as $21 per ton, almost $60 per ton less than the contract price. Other above-contract tomatoes were disked under. Even with the record tonnage, however, growers in Northern California were hurt economically when the October downpour ruined their crops.
Mike Montna, president of the California Tomato Growers Association, noted the irony of the huge crop in the midst of California’s three-year drought.
“We had ideal, dry spring weather for planting followed by an ideal growing season,” he pointed out. “We desperately need rain in California with the water issues we are facing.
“However, rain and tomato planting do not necessarily go hand in hand. In fact when the spring is dry, the processing tomato crop gets bigger,” Montna pointed out. Tomato planting begins in February.
“Disease, soil compaction and the inability to get soils ready for planting are the unwanted byproducts of rain. We did not have that in 2009,” he said.
California produces more than 90 percent of the nation’s processed tomatoes and nearly half the world’s total processed tomato tonnage.
It was obvious early that the crop was going to be huge. Montna was getting calls in mid to late August – not long after the harvest began – asking about homes for over-contract tomatoes.
“It is hard to say how much went unharvested. We do not keep track of it,” he says. “It was over the board; short fields, long fields. Some people sold all their tons and some had tomatoes left over.”
He did comment that those growers looking for a home in August did not call back. Larger growers with several different fields who had unharvested tomatoes in overage fields harvested later when other fields came up short of contract tonnage.
Although processors may contract for early fields on a per acre basis, most grower-processor contracts are drawn on a tonnage per field basis. When fields yield contracted tonnage, harvesting stops. Contracts specify delivery dates to keep plants running.
Tomatoes can be held in fields for a few weeks beyond optimum harvest dates, but the crop can be reduced in size and quality if held too long.
Another irony of the 2009 record crop was that it was produced in the third year of a natural and judicial/regulatory drought that has left growers on the West Side of the San Joaquin Valley short of water. This area is a major processing tomato growing area. With less acreage available due to a lack of water, processors moved to other areas where water was available to growers to get the 13.3 million tons they said they wanted in 2009.
This resulted in many new tomato growers, as well as expanded acreages for existing growers, both of whom had access to water. Montna said processing tomato acreage increased sharply in two primary areas. One was San Joaquin County where it went from 28,800 acres in 2008 to 44,000 last year. Acreage went from 13,000 in Kern County in 2008 to 25,000 last season.
In addition, acreage switched from the West Side of Kings and Fresno counties to the eastern part of those two counties, where tomatoes have not been grown in the past. Much of the acreage on the East Side of the Valley is in trees and vines with open fields relatively small in size, compared with large West Side fields.
While a year like 2009 makes for great coffee shop and e-mail bantering, reality sets in quickly when it is over as growers and processors jockey on price, acreage and tonnage for the year after the record 2009.
“One would believe that an industry which achieves the desired amount of raw product that it contracted for would be happy with the inventory in the warehouse. Unfortunately, based on responses from each of the processors, this does not seem to be case,” according to Montna.
“CTGA and its members understand that this year’s crop of 13.3 million tons may have increased inventories to a higher level than the industry would like to see and an adjustment will need to be made in 2010.” However, Montna said growers cannot afford to lose money to compensate for that adjustment.
CTGA has opened the bidding for the 2009 tomato contract at $75 per ton, down $5 from last year’s agreed upon price.
This is based on CTGA member estimates that growing costs will range from $2,650 to $3,050 for a 40 ton per acreage crop in 2010, the average over the past five years. This is down from last year’s cost of $2,800 to $3,200 per acre.
Montna said a $75 per ton price will represent a 5.2 percent return on investment next year. Montna considers this return “low based on the risks that a grower is taking, but we realize that the current situation warrants some concessions and the growers are willing to do their part for this year.”
Four processors have countered with offers in the $60 to $61 per ton range. Another offer was for a multi-year deal with a fluctuating price with a base of $62.50.
“Obviously, the CTGA believes these offers to be too low for a grower to maintain profitability for next year,” Montna said.
Montna emphasizes that water remains a major issue. The state recently released its early season estimate of just 5 percent of contracted water from the State Water Project. This is the lowest in history.
“Every region of the state has an issue with water,” said Montna.
While many growers have access to well water, the quality of that water is inferior to surface deliveries. “There are salinity issues with well water. Even in the north state, there are issues with water deliveries.”
Growers are being forced to blend well water with available surface water to improve quality. There is also a growing concern that salt build-up in the soils from well water may reduce or limit production, unless surface water is used to leach out salts.