The pricing for tomatoes has finally been reached after much negotiation. CTGA (California Tomato Growers Association) has agreed to accept $80.00 per ton from most processors. This is 3.6% below the 2014 record price of $83.
While one competitor settled earlier for a higher price of $83, Morning Star, the supplier for Paradise, along with some other processors, went into negotiations to get the best pricing and value for the customers. The effort was successful, resulting in a price that was $3 per ton lower.
This year 295,000 acres of tomatoes have been planted and the harvest is expected to be up 2.1% from 2014, coming in at 14.3 million tons of processed tomatoes. Growers will be monitoring the effects of El Nino and the potential impact it could have on harvesting late in the season.
Although there are still concerns regarding future drought and water regulations in California, there were positive factors impacting this year’s harvest. This included the use of more drip irrigation systems, which resulted in water conservation of 25% or more. Plus, with the resourcefulness of farmers using surface water, riparian water and senior water right’s water supplemented by ground water, the state is forecasted to have a record crop.
Worldwide Supply
The global forecast is 46.5 mm tons vs. 44 mm tons in 2014, an increase of 5.7%. This is the second year of recovery after several years of below average volumes.
The California crop makes up 31% of this total volume.
Italy is the second largest processing tomato producer worldwide, second only to California, but its position is threatened by China. The other leading producing countries are: Turkey, Spain, Iran, Brazil and Portugal, according to the World Processing Tomato Council.
Worldwide Demand & Exports
Overall demand for U.S. tomato products is still strong. This coming year’s export volume is on track to be the second highest on record.
Paste exports are not expected to reach last year’s high volumes. The strong dollar makes exports, including U.S. paste, more expensive for our international customers. Because of this, international customers are finding more favorable buying in local markets and other countries.
International customers now make up 25% of the U.S. tomato product movement.
