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May
26, 2006
Dear
Tomato Grower:
In this issue:
-
2006
Pricing: By region and delivery position
-
2006
Negotiations: What worked and what didn’t
-
2007
Outlook: Statewide vs. Regional Pricing
2006 Price – Based on
CTGA Contracts:
-
Average state price
including early or late season premiums $60.15
-
Average price
without
premiums
$58.00
-
36% of crop will
have early or late season premiums
-
Highest base price
is $61 vs. $57 as lowest
-
Three northern
processors will pay ESP’s ranging from $2 -
$4
-
Late
Season
Premium
Ranges
-
Low End for Sep 15
& 26 $3 -
$5
-
Mid range for Sep
5, 15 & 25 $1,
$4 & $6
-
Negotiated High
End Sep 15, 26, Oct 8 $5, $7.5
& $10
·
Several
processors sweetened the pie for after Oct 15
$15
2006
Negotiations:
Did CTGA regional
negotiations work? Yes.
-
If Northern Growers
hadn’t insisted initially on $62.50, its doubtful that the price in
other parts of the region would have risen above $55
-
CTGA Regional
meetings with growers allowed for discussions of costs, supply & demand,
confirmation of or denial of market rumors.
-
A handful of
southern growers were able to take advantage of an offer in October to
lock in a base price of $57 with a fixed harvest rate. They knew that
they may leave money on the table, but felt a firm price in hand 14%
higher than the previous year was worth locking in.
-
Northern growers
negotiated up to $4/ton more on their base price and up to $5/ton more
on late season premiums.
Did regional
negotiations fully meet expectations? No.
-
Northern Growers
felt that a handful of Southern Growers sold too early and undermined
efforts to reach their target price of $62.50.
-
Some growers did not
like individual CTGA members being able to cut their own deal whereas
others thought that this flexibility was just what the Association
needed.
-
Some growers
committed to canneries w/o a price undermining the regional groups
leverage. This, for example, kept the price in the Los Banos/Firebaugh
area from reaching $59.
-
Negotiations dragged
on too long – leverage swung from the growers to the processors in
February.
-
Northern processors
were very upset about having to pay higher prices which put them in an
awkward position with their customers.
-
Regional negotiating
groups were vulnerable to processors bringing fruit from outside the
region. One northern processor cut their growers acreage by 30% in order
to bring tonnage in from another region.
2007 – North / South
Dialogue:
In mid June the CTGA
will organize meetings between Northern and Southern growers in order to
address the following:
-
Compare growing
costs, yields, alternative crops and return expectations.
-
Determine whether
there is an opportunity to work for a unified price and terms of trade
-
Ironically many
Northern Growers would like to see a unified price whereas many Southern
Growers expressed satisfaction with regional pricing.
2006 Crop:
Feedback continues to
be positive in terms of the overall crop quality, but with growers still
planting for another 2 weeks we better have a mild summer and a warm, dry
fall in order to meet market demand.
Fresh Market Tomatoes:
(a reminder
from the Tomato Commission)
-
Individuals who
purchase processing fields and pack for the fresh market will need to
register with the CDFA, pack into new containers, with proper IRQ
markings as provided under the State Code.
-
Gunnysacking falls
under the same regulations and there must be registration with the
Department, trace-back, and the maintaining of records.
-
State and County
inspectors will monitor terminal markets and other venues to ensure
compliance. Product that fails to meet the criteria of Article 43 will
be red tagged.
Hunts launches Premium
Canned Product Line:
Food Processing
magazine takes a look at Hunts new Organic Product Line. The article does
a good job at addressing some of the challenges faced by canned tomato
marketers. The article is at the following link:
http://www.foodprocessing.com/articles/2006/063.html
Tomato
Guestimator- Last Chance:
If you’re interested
in getting in the running for an excellent Cabernet get your estimate in
by
May 31.
Questions or comments? Please call (209) 478-1761 or email
rdsiragusa@sbcglobal.net.
Ross Siragusa |
