January 12, 2005

 Dear Tomato Grower:

 2005 Pricing:

 Little change occurred since prior to the holidays. The canneries fall in the following camps:

$46.00 - Rio Bravo (Primarily JG Boswell tonnage)

$50.00 -  Ingomar, Los Gatos, Morningstar, SK, Stanislaus

Undecided – Del Monte, Hunt, Campbell’s, San Benito, Escalon, Unilever

Should be clarified over the next few weeks 

 Increased demand of 8% is encouraging and it confirms comments by some canners that demand has been robust. It also is likely to be a reflection of poorer quality fruit that was received by processors but not recovered. Typically demand during Jan – May shows a decline as shown below.

 Based on the past 10 years, we project 2004/2005 demand to be 11 million tons which will almost assuredly draw down inventories with likely production in the 9.5 – 10.5 million ton range.

 UCCE Processing Tomato Production Meeting – Jan 19:

 On January 19 at our annual meeting in Modesto, the UCCE will be presenting their Processing Tomato Production Meeting for the San Joaquin Valley. I strongly suggest that you attend this meeting because the insights provided will save you money and help improve the quality of your tomato crop. I had the opportunity to attend the Yolo and Colusa County meeting and the content was excellent. The topics to be covered are:

• Deficit irrigation & K fertigation for quality improvement
• Evaluation of Mustard Cover Cropping & Comparing Direct Seed vs. Transplant Populations
• Nightshade and Nutsedge Control
• Transplant Spacing with Multiple Plant Densities & Evaluating Extended Field Storage Varieties
• Powdery Mildew Control Evaluations
• Chemical Control of Garden Symphlyn
• The Role of Farm Advisors in the Development of the California Tomato Processing Industry

 The last topic above will be presented by Mike Murray. It will touch on where the UCCE will be heading as far as tomatoes and how if it doesn’t adapt to grower/industry needs it will vanish. The UCCE’s involvement in the processing tomato industry began at a similar time to the CTGA and, interestingly enough, the CTGA has the same challenge – if we don’t adapt, we’ll vanish too. This is why we’ll be looking at promotion and nutritional research during our annual meeting.

 CTGA Focus of Promotion and Nutrition:

 CDFA Secretary AG Kawamura, Rodger Wasson from the Strawberry Commission and Dr. Clare Hasler from the Robert Mondavi Institute will share success stories on generic promotion and present an update on processing tomatoes’ nutritional benefits at our 58^th Annual Meeting January 19.  This will be an excellent opportunity to learn from industry leaders.

 Why should the CTGA grow beyond only Bargaining:

• Two-thirds of the processing tomato growers either don’t see value in bargaining or don’t see a need to support the CTGA because they get the benefits regardless.
• Barriers to entry have been reduced so tomatoes will be priced at levels that are competitive with other crops or at levels that make some sense economically.
• Many of the state’s most successful growers are pursuing exit strategies which doesn’t bode well for the future health of this industry
• While the industry has done an admirable job of driving down costs it’s down an abysmal job of holding onto the savings. Let me repeat from previous bulletins and presentations, 10 years ago processors and growers shared 62% of the total margin whereas we’re now fighting over 31%.
• More will be gained by furthering research, promoting exports, creating a mechanism for managing surpluses, and becoming market driven than by focusing only on price from one year to the next.
• We need to assemble CTGA members, non-member growers and processors to develop a strategy for growing demand for our product.
• Lastly, please review the chart below. It shows revenue per acre after taking inflation into consideration. It explains why tomato growing isn’t as good as it used to be. Let’s do something to change it.

 Please join us at the Annual Meeting so we can get the dialogue started.

 Ross Siragusa

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