May 17, 2006

 Dear Tomato Grower: 

In this issue:

·        Weather conditions the past 3 weeks were ideal and overall plant health surprisingly good.

·        Crop estimate holds at 10,000,000 tons with a warm, dry October key

·        Canneries expect growers to push schedules back into higher risk positions, but few are willing to offer additional compensation 

Weather Impact:

Ideal weather reported across the region.

·        Southern crop still 10 days late, but most growers report excellent conditions. One grower stated that “it’s too good - something’s bound to happen”.

·        Northern transplants going in at a rapid pace but northern processing plants unlikely to reach full capacity until late August.

·        Older transplants that caused concern have responded well, but there has been no weather related stress since planting. The greenhouses deserve a lot of credit for managing the situation as well as they did.

·        Many transplants that are currently scheduled to be delivered are too immature and will need to be held otherwise the plants are not likely to survive in the field. This will force processors to roll schedules back. 

·        Bunching of delivery schedules is a concern and will be driven by yield. If yields approach contracted levels, there will be problems commencing in mid August in Fresno County and working its way north. The highest risk appears to be early September in the north.

·        Rivers still running very high causing seepage in adjacent fields. 

·        Fields in San Joaquin County that lacked bed preparation prior to the spring rains are not likely to be planted. 

Bottom line – crop is still late, but overall outlook has improved as long as we have a dry, warm fall.

 Crop Estimates: 

Although the general health of the crop is good, it’s too early to raise the crop estimate to above 10,000,000 tons. Key factors to consider:

·        The entire industry will not be at full capacity until late August. This means if there is any bad weather in September the crop will come up even shorter than 10,000,000 tons.

·        A compressed planting period combined with warmer than average temperatures will almost assuredly cause bunching of delivery periods. Some processors have worked diligently to mitigate the risk whereas others are rolling the dice. Key periods to watch are Aug 15 - 20 in the South and early September in the north.  

Late Season Tomatoes: 

What’s the big deal about late season premiums? Named and Multi-Peril Insurance runs at approximately $2.50 - $3.00 per ton, so shouldn’t $3.00 to $5.00 per ton be sufficient? For those of you not accustomed to growing late consider the following and draw your own conclusions: (costs basis ’01-’05 36 tons/acre average state yield) 

Additional Costs: (Per Ton)

·        Fungicides                                                   $2.05

·        Insurance                                                     $2.55

·        Harvest Expense     (50 tons/hr)           $0.60 2 additional sorters

Total                                                                      $5.15 

The costs do not consider any yield reduction or if harvest rates are reduced due to moldy conditions.

·        15% Yield reduction / 25 tons/hour                 $6.60

·        40% Yield reduction / 17 tons/hour                 $9.35 

Additional considerations are risk expressed as an opportunity loss: (basis $58/ton)

·        15% Yield Reduction                                     $313.20 per acre

·        40% Yield Reduction                                     $835.20 per acre

Growing in late September and October is not for the faint of heart.

Monthly Diesel Off-Road Prices: (Based on Fresno)

·        Prices are up 45% April ’04 to April ’06 and up 21% from a year ago.

·        If current May pricing holds we will see another $0.20/gal added on top 

Valley Legislators Take a Stand: (following from Don Gordon at the Ag Council) 

Late last week a number of Valley legislators either voted “No” or withheld their votes on AB 140, the proposed bond measure for flood protection. The bill was part of the $37 billion infra-structure bond package that was approved late last week by the Legislature. One of the major issues that played into the debate was the absence of funding for surface water storage. Valley Republicans who voted “No” included Dave Cogdill, Doug La Malfa, Bill Maze and Mike Villines. Additionally, Rick Keene was recorded as “Not Voting.” Among the Democrats, Juan Arambula, was recorded as “Not Voting.” By not supporting AB 140, these legislators went against their respective party leaderships and the Governor. In Arambula’s case, retribution was immediate, because he lost his committee chairmanship, and was forced to re-locate into the smallest office in the State Capitol. During my 31 years working in the legislative process, I’ve witnessed several instances when the “hammer” was brought down on legislators to either “fall in line with leadership or else!” Usually, when a committee chair was at risk, the targeted legislator complied.  So, Juan Arambula, and the other Valley legislators, deserves special recognition for taking their stand. 

Tomato Guestimator- Reminder: 

Please see the attached form for your 2006 crop estimator. Pat Rooney and Glen Robertson walked away with a bottle each of 2001 Silver Oak for their winning 2005 estimates. 

Questions or comments? Please call.

Ross Siragusa

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