CTGA Tomato Bulletin - January 10, 2002

January 10, 2002

Dear Grower:

Seed Prices to Rise 10% - 15% for 2002 Season
Seed Companies have posted increases in seed prices of 10% to 15% for most varieties in an effort to recoup losses in revenues due to reduced seed usage. Growers routinely planted one pound per acre in the late 1980’s when Open Pollinated varieties were selling for around $30 per pound. Seed companies soon put all their efforts into the development of Hybrid varieties, which allows them to protect their Trade Marked characteristics and charge a handsome $200 per 100,000 seeds! Hybrid varieties did bring additional vigor, disease resistance, increased yields for growers and a high level of performance and pack out for processors. Growers quickly responded to the increased cost with the utilization of highly efficient air-planters that allowed growers to use ½ pound per acre for early planting and as low as 1/3 pound or less for ideal planting conditions. In addition the utilization of transplants was being tried to see if it would help offset the cost of the Hybrid seed. As new systems were being developed using new transplanters, herbicides and cultivation techniques and with seed prices creeping up, transplants became an acceptable alternative.

Today we are approaching 40% of the industry using transplants, which means even fewer pounds of seed are needed to grow a stable 10.2 million ton industry.

What exactly are we getting for our increased cost? Greater disease resistance? Greater yield? A better pack out? Or even the hope of these developments in the near future? After all, many of our cutting edge efficiencies in the processing tomato industry have come through the continued introduction of new varieties. There seems to be something wrong with an industry where the processor chooses the varieties, the seed companies set the price and the grower pays the bills.

*SAMPLE SEED COSTS 2002*
*100,000 Seed Count Equiv.*
				Percent
Company	2001		2002	Increase

Orsetti
	$257	Top Tier	$295	15%
	$246	2nd Tier	$283	15%
Heinz
	$233	Newer Varieties	$267	15%
	$230	Older Varieties	$255	11%
Peto
	$250	Top Tier	$288	15%
	$247	2nd Tier	$278	13%
Campbell
	$238	Newer Varieties	$265	11%
	$230	Older Varieties	$255	11%

Processing Tomato Cost Study for 2001 Released

The University of California Cooperative Extension has released its 2001 Sample Costs to Produce Processing Tomatoes for Sacramento Valley Region. This study is intended as a guide only, and can be used to make production decisions, determine potential returns, prepare budgets and evaluate production loans. The results are somewhat surprising in that the costs are lower than the last study conducted in 1997. The major operational changes that brought about the reduction were found in primary tillage, rents, greater harvest efficiency and a reduction in phosphorus fertilizer. The full study can be found at http://coststudies.ucdavis.edu or obtained from selected county UC Cooperative Extension offices.

	$/acre	$/acre
Cost Item	1997 study	2001 study
Total cost per acre	$1,741	$1,710
Land rent (15 to 12%)	$274	$216
Primary tillage	$73	$49
Labor	$398	$379
Fuel	$114	$124
Water	$88	$92
Fertilizer	$120	$88
Herbicides	$51	$67
Other pesticides	$56	$39
Harvest expense	$215	$252

Minimum Wage Increases 8% on January 1, 2002

As of January 1, 2002, California’s minimum wage will increase to $6.75/hour which represents an 8% increase over the current $6.25/hour minimum wage and a 17% increase over December, 2000 levels. Following the January 1 increase, California’s minimum wage will have risen 35% since March 1997 and will be the fifth increase in the minimum wage during this period. Labor costs represent over 30% of a processing tomato growers operating cost and this latest jump will increase a growers costs by over $30 per acre.

Johnson Sells Tomato Harvester Rights
Johnson Farm Machinery of Woodland, has sold its rights to the tomato harvester with its patented three weight shaker for an undisclosed amount to CTM in Crows Landing. Johnson Farm Machinery had been manufacturing the tomato harvester since the company moved to Woodland in 1964. “(The tomato harvester) was our largest production,” said Johnson Farm Machinery vice president Kirk Friedman. However, production of the tomato harvester has slowed in the past few years. The reason (for selling the tomato harvester) is it’s become increasingly difficult with the small number of machines being sold to make the returns the company requires,” said Friedman.

US Processed Tomato Supply & Movement
Processed tomato stocks on hand totaled just over 8.4 million raw product equivalent tons on Dec. 1, down 10% from a year ago. Movement between June 1 and Dec. 1 was 5.3 million tons, down 16% from 2000, according to a report released by the California League of Food Processors.

Tons:	2001/02p	2000/01	% Change
June 1 Stocks	4,569,959	4,742,842	-3.6%
Pack	9,150,141	10,858,240	-15.7%
Season's Supply	13,720,100	15,601,082	-12.1%
Dec. 1, 2001 Stocks	8,415,339	9,313,846	-9.6%

Apparent Disappearance:
6 Month	5,304,761	6,287,236	-15.6%

All positions are stated on a "raw product tons" equivalent basis.
2001-2002 Pack based on PTAB final report of 8,640,141 for California, plus estimated 510,000 for remainder of U.S.

Tomato "Paste For Sale" in Drums, Bins & Bulk
The tomato paste for sale pack totaled just under 3.9 million tons, raw product equivalent, down 24% from the Dec. 1, 2000 pack, according to the California League of Food Processors.

Tons:	2001/02p	2000/01	% Change
Paste for Sale**Pack	3,866,566	5,077,093	-23.8%
Inventory Dec. 1	2,736,260	3,771,544	-27.4%

2000 Pack year statistics based on reports from processors handling 97% of California tonnage
2001 Pack year statistics based on reports from processors handling 94% of California tonnage
**Paste for Sale – Paste, converted to a raw product “paid for tons” equivalent, being held in drums, bins, and bulk, that has
been packed to be sold. Does not include paste being held for companies own remanufacture.

Restaurant Sales Rebound
Restaurant sales grew 4.6 in November over the same month last year to $25.7 billion in sales. November was the second consecutive month of sales growth following the terrorist attacks of September 11. In all, sales at the nation’s foodservice establishments and drinking places reached $292.6 billion for the eleven months ended December 1, up 4.5 percent from the same period last year.

Reserve Your Seat Now for CTGA's 55th Annual Meeting
Join us for CTGA’s 55th Annual Membership Meeting & Luncheon to be held on Tuesday, February 5, 2002 during the CLFP Expo & Showcase at the Hyatt Regency in Sacramento, California. The session will begin at 11:00 a.m., with keynote speaker Kerry Tucker of Nuffer, Smith, Tucker, Inc. As a member of the State Board of Agriculture and founder of Food Foresight, Mr. Tucker is widely renowned for his keen abilities to identify emerging trends in the food industry and develop appropriate strategy options. During this meeting he will be leading us in an interactive session on factors of critical importance to the future success of our industry. You will want to check YES on your RSVP, as this is one meeting you don’t want to miss!

A buffet luncheon will be sponsored by CTGA for its members. Non-members will be asked to pay a nominal fee.

John C. Welty
Executive Vice President

| Tomato Bulletins | Press Releases | Editorials |