CTGA Tomato Bulletin - June 7 2007

June 7, 2007

Dear Tomato Grower:

In the current Tomato Bulletin:

USDA / NASS estimates 2007 crop at 11,800,000 tons with 293,000 acres
Water pump shutdown raises concerns whether 50% allocation will be achieved
All contracts signed, but one
Wellness Council charts path for next few months
EPA and DPR hold workshops to unveil significant changes for fumigants – Vapam
Changes in truck securement regulations could cause a major harvest headache

USDA Estimate:

USDA reduced its 2007 estimate from 12,000,000 to 11,800,000 tons
Acreage cut from 305,000 to 293,000
Yield increased to 40.3 from 39.3
County Breakdown: (‘000 acres) 2006 2007 Change

Fresno 106 122 +15%

Yolo 34 36 + 6%

San Joaquin 35 33 - 6%

Kings 22 23 + 5%

Colusa 17 16 - 6%

Merced 15 16 + 7%

Kern 10 12 +20%

Stanislaus 16 11 - 31%

Sutter 7 7 0%

Madera 6 4 - 33%

Sacramento 3 2 - 33%

Other 12 11 - 8%

Total 283 293 + 4%

Comment:

Estimate based on processor submitted comments for tonnage and acreage.
11,800,000 figure is feasible, but a stretch. Unlike 2004, this crop will get stressed because of a lack of water or water quality.
Other than Yolo all the growth is in the south. Taken at face value the Fresno figure jumps off the page. Reductions in the north are not surprising given attractive alternative crops.
2007 CTGA Tomato Guestimator Average: 11,284,000 tons. You may question the value of this information, but in 2005 & 2006 the averages were within 35,000 tons of the actual.

Delta Pump Shutdown Raises Red Flags:

Although initial press reports appeared benign the shutdown causes significant concerns:

Many growers especially in the permanent crop rich Westlands Water District based their crop plans on purchasing supplemental water.
Applications in Westlands for supplemental water totaled 138,000 acre feet (AF) but they were only able to secure 56,000 AF.
Delivery of the aforementioned supplemental water and any additional allocations are dependent on Delta Pumps operating.
Bureau of Reclamation indicated that 50% water allocation may be in jeopardy due to the pump shutdown.
Prior to the pump shutdown a water auction for 100 AF ended with the final price at $510/AF. The price paid is a reflection of desperation to get water to finish a crop. After the pump shutdown another 700 AF traded at $517.
Some cotton growers are taking a look at whether it makes sense to continue growing this year’s crop or just sell the water outright.

Potential impact for Tomato Growers is the following:

Reduced yields
Increased costs for finishing the crop due to well irrigation
Little or no water for 2008 field preparation
If there are any surplus tomatoes, they shouldn’t trade at a discount
2008 will be a real puzzle because growers won’t know their water allocation until well after they need to be committed for ’08.
Comments from several growers indicated that if they have a 50% allocation they will struggle to maintain current acreage, but how could anyone be sure that they’ll receive 50%? Other growers are gearing their plans around 25% which will have a large impact on tomato acres.

All Contracts Signed, but One:

CGTA has signed contracts with all processors @ $63 except Morning Star. The CTGA and Morning Star had a constructive meeting this week. Morning Star will be presenting a revised offer shortly.

Vapam:

DPR & EPA are revising regulations for fumigant use which has been an on-going process for 9 yrs.
Despite visits to Washington, and numerous memos to EPA and DPR, spray blade applications are still being lumped into shank injections which would require a ½ inch water cap after application. This of course is nonsense since spray blades are only utilized when adequate moisture is already present.
A further concern is that despite the November – March applications when very little off-gassing occurs, vapam would be restricted by ¼ buffer zones; neighbors in buffer zones will have to sign off on the notices; 80 acre daily limits.
Chuck Rivara at CTRI is working with DPR and EPA to see if spray blade applications can be exempted from the regulations like drip.
The only positive news from this process is that tomato applications will be exempted from reductions envisioned in DPR’s VOC reductions due to the November – March applications.

Wellness Council:

Wellness Council board met and elected CTGA Director and Los Banos grower Aaron Barcellos to be President and Ross Siragusa as Secretary/CFO
Research at UC Davis and Penn State is getting geared up with the 1^st payment made.
Rodger Wasson had very constructive meetings in Washington with the USDA and Food Products Association about getting the Wellness Council front and center in discussions with inclusion of tomato products in the development of Nutrition Policy.
The Council issued a response to a recent study that called into question the efficacy of Lycopene in the prevention of prostate cancer.

Truck Securement Legislation:

The action alert sent to growers by the CTGA and other agricultural organizations is getting the attention of legislators.
We are hopeful that a solution will be reached in time not to affect the tomato harvest, but it is not a sure thing at this stage.
A large group of Valley legislators signed off on a letter by Assemblyman Aghazarian sent to the Governor’s office.
For those of you that called or e-mailed your Assemblyman or Senator, thank you for your support.

Questions or comments, please call.

Ross Siragusa, President & CEO

(916) 925-0225