February 25, 2008

Dear Tomato Growers: 

·        Final details for 2008 contracts completed; time to start thinking about 2009

·        USDA issues 2007 final report, which showed 40.82 tons yield with 296,000 harvest acres. Kern bags top honors at 46.72 tons/acre

·        CTGA annual meeting draws >200 attendees with topics covering Wellness Council PR plan, United Potato bargaining success story, Cooperative Extension tomato presentations

·        CDFA and Tomato Industry develop strategy to fight spread of Tomato Yellow Leaf Curl Virus 

2008 Contracting Concludes: 

During this past week, the CTGA agreed to terms with Escalon and finalized solids programs with Ingomar, Los Gatos and Morning Star. 

So what did the negotiations accomplish? 

·        A $70 base price established prior to growers committing seed. More than 70% of the grower base said this was the priority and a long sought goal

·        Late season premiums improved to:

-          Sept 15      $5.00

-          Sept 22      $7.50

-          Sept 29    $10.00

-          Oct 6        $15.00

·        Northern growers negotiated an early season premium which will apply to Campbell’s growers statewide

·        Contract differences narrowed with all late season programs on a delivered basis; exception Campbell’s which pays June 1 for scheduled deliveries

·        Contracts with solids programs became more uniform 

Did we accomplish everything we set out to do? Almost. 

·        Late season premiums, especially late, do not fully cover the risk

·        Early season premium not fully implemented in the south

·        Water insurance was not uniformly applied across the south

 In each case, not enough growers were willing to insist.            

Why were the negotiations successful? 

·        A clearly defined position communicated throughout the region.

·        CTGA membership is particularly strong among early growers who were willing to work together on a regional basis.

·        The $70 price and terms were supported cost and yield expectations.

·        Acres were short due to competitive crops, reduced water and disrupted traditional supply relationships – for once growers had a number of good options.

·        Processors could, albeit reluctantly, accept $70 once they recognized the tightness of acreage. 

Given that several processors are having a difficult time finding enough acres to meet their pack plans it is easy to “back trade” and say the price could’ve or should’ve been higher. Before burning up too many gray cells on this exercise please consider the following:   

·        $70 was a level that most growers could support and were willing to do so in exchange for an early agreement.

·        Few, if any, growers were willing to withhold seed in exchange for a higher price.

·        Roughly half the grower base isn’t part of the CTGA and can easily undermine membership efforts to hold for a higher price.

·        No one’s obliged to sell at $70 

What about 2009? 

The major issues affecting 2008 are not likely to change anytime soon. 

·        Barring a March Miracle and an about face on Delta pumping restrictions, water availability will be constrained south of the Delta. This will directly impact tomato acreage.

·        Futures markets indicate continued firmness into 2009 with $300 wheat and $200 corn.

·        Dairy demand expected to remain strong, which will support $225+ levels for alfalfa.

·        All of this points towards higher tomato prices. 

Bottom line: California tomato acreage will be tight for the foreseeable future. Expect to hear more discussion on term contracts; the key will be finding the right pricing mechanism. 

Italian Growers Settle: 

Tomatoland Magazine reports that the 2008 price in Italy settled at € 79.50 per metric ton, which equates to $105 per short ton. On top of this, growers will receive approximately $22.50/ton in the form of an EU subsidy. As the EU reduces subsidies the grower prices will have to be increased to compensate otherwise processors will sharply lose acres. This paints a bright picture for both  California processed tomato product exports and infield tomato prices.  

2007 USDA Yield Report: 

                   Total                          12082000             296000                 40.82 

Before jumping to conclusions, it’s worth noting that there are pretty wide variations when looking at PTAB’s county data and comparing it with USDA (thanks to CTRI for pointing this out): 

·        Yolo increases to 40.07 and Colusa decreases to 40.85

·        Kings jumps to 45.7 and Fresno drops to 41.4

·        Regardless of the report, Kern remains the top dog 

Another issue that’s puzzling is where the USDA comes up with its first delivery point and the delivered processing plant figures. We figure that they’re off the mark on the low side by at least $2.00/ton 

CTGA Annual Meeting: 

The CTGA continues to build on a string of successful annual meetings. More than 200 people attended and the topics were as follows: 

CTGA Board: Don Cameron stepped down as Chairman after 5 years, and Tom Braner and Bob Williams resigned from the Board after 22 and 8 years respectively. During Don’s tenure with the active support of the board, the CTGA has seen the following changes highlighted on the next page: 

 Additional highlights include:

 ·        Refocusing CTGA’s strategy and returning the Association to profitability

·        Launching the Tomato Products Wellness Council

·        Selling Stockton office prior to commercial property downturn and relocating to California Farm Bureau offices where the CTGA can be better plugged into issues affecting agriculture 

The 2008 Directors elected by the membership: 

                                                Bret Ferguson, Chairman - Huron - District 5      

                                                Aaron Barcellos, Vice-Chairman - Los Banos - District 4

                                                Jim Beecher, Vice-Chairman - Five Points - District 5

                                                Bruce Rominger, Secretary/Treasurer - Winters - District 2

                                                Don Cameron, Past Chairman - Helm - District 5

                                                Darrin Williams - Arbuckle - District 1

                                                Dino Del Carlo - Stockton - District 4     

                                                Hal Robertson - Tracy - District 4

                                                Alan Sano - Firebaugh - District 5

                                                Rick Worth - Huron - District 5   

                                                Stan Nunn - Brentwood - At-Large

 Speakers:  Cooperative Extension Northern San Joaquin Topics and Presenters:           

Brenna Aegetter:       Powdery Mildew Update

            Gene Miyao:              Evaluation of a Triticale Grass Cover Crop

            Mike Davies:             Fusiarium & Verticillium Wilt Control

            Bob Gilbertson          Spotted Wilt & Tomato Yellow Leaf Curl Virus

            Antoon Ploeg            Tomato Resistance Against Root-knot Nematodes

            Blaine Hanson           Irrigation & Salinity Managament Consideration Under Drip

            Tim Hartz                    Fertility Management under Drip Irrigation 

Copies of these excellent presentations can be found at the following link: 

http://cesanjoaquin.ucdavis.edu/Vegetable%5FCrops/Presentations.htm 

Other Speakers: (more in depth analysis will be provided in the next Bulletin) 

Albert Wada, Founding Chairman, United Potato Growers.

·        Albert discussed the success of the United Potato Growers, which over the past 4 years has brought profitability back to the fresh market potato business with price increases of 122%.

 Dr. Elizabeth Sloan, Sloan Trends, Inc.

·        Liz Sloan spoke about the significant opportunities to grow the processed tomato demand in the US due its unique combination of nutrition, taste, affordability and existing consumer acceptance. She scoffed at the idea that US per capita consumption has reached its limit.

 Dan Snyder, Wasson & Associates

·        Dan Snyder who was behind numerous successful food industry public relations campaigns for Porter Novelli laid out the Tomato Wellness Council’s PR plan. The first step included a presentation to top food editors and executives from the America Dieticians Association, which occurred Feb15- 17 and was a major success.

 Kim Rothstein, Principal, Hale Group

·        Kim summarized recent strategic planning that the CTGA undertook last fall. She noted that the CTGA is on the right track, but needs to strengthen its membership base. 

Next year’s Annual Meeting will be held in Modesto on January 29, 2009.  Save the date! 

Tomato Yellow Leaf Curl Mitigation: 

The CDFA along with County Ag Commissioners, UC Cooperative Extension, CTRI and grower, processor and greenhouse company representatives met twice to discuss steps that can be taken to mitigate the spread of Tomato Yellow Leaf Curl Virus from affected areas in Imperial County and Arizona. Although the risk is perceived as low, a proactive protected zone strategy will be implemented. This strategy was implemented for Pierces Disease in the wine industry. 

Current California Situation: (Provided by CDFA) Tomato Yellow Leaf Curl Virus (TYLCV) was first identified in California on March 26, 2007, where it was found on tomato plants growing in a school greenhouse located in Brawley, Imperial County.  During subsequent surveys conducted between March-July, eight residential sites were also found positive in Brawley and El Centro.  All positive plants were destroyed. 

In November 2007, surveys of nurseries and retail outlets found a tomato plant at a Lowe’s in El Centro, Imperial County positive for TYLCV.  A trace back survey lead to the discovery of infected tomato plants at a nursery in Thermal, Riverside County. The tomato plants at the Thermal nursery were destroyed.  A trace forward survey was conducted in conjunction with affected county agricultural commissioners’ offices.  

Delimitation surveys conducted in November and December 2007 found field tomato plants positive for TYLCV near the area of Niland, Imperial County. The TYLCV infested plants have been destroyed and the area treated for whiteflies. In addition to tomato plants and whiteflies, TYLCV was also identified on common malva weed (Malva sp.) and desert straw apple (Datura discolor). 

Quarantine History and Vector/Disease Information: The existing State Exterior Quarantine for TYLCV (CCR 3286) prohibits the movement of tomato plants from Florida to California.  New information has revealed that TYLCV also exists in several other states and Mexico.  Historically, quarantines have not been effective at preventing the spread of whitefly–vectored viruses after the virus has been introduced into an area where the virus-infected whiteflies can spread naturally or artificially on other plants.   

TYLCV is transmitted by adult whiteflies (Bemesia sp.) and has a broad host range from several plant families including Solanaceae, Malvaceae and Fabaceae.  Several asymptomatic hosts are also known, including horticultural plants (i.e. pepper and common bean) as well as Solanaceous weeds (i.e. nightshade). 

More information can be found at the following link: 

http://www.ipm.ucdavis.edu/PMG/r783103311.html#REFERENCE

Comments and questions please contact Ross Siragusa at 916-925-0225.

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