CTGA Tomato Bulletin - July 10 2007

July 10, 2007

Dear Tomato Grower:

In the current Tomato Bulletin:

Negotiations for 2007 tomato price end with universal agreement at $63.00/ton
Harvest begins with most plants already operating across the state
Crop conditions favorable, but tight water market hangs over industry
CTGA hires Hale Group to assist in develop long range plan with particular focus on best bargaining practices

2007 Pricing ends after 13 months:

Last week Morning Star and the CTGA came to an agreement on a $63.00 contract with terms that were competitive with already approved contracts. This brought to a close 2007 pricing discussions that began in mid-June ’06 when approximately 60 growers from the North / South met at Harris Ranch to discuss 2007 prospects and expectations. This was followed by numerous meetings, calls, e-mails and faxes.

So why did it take so long?

No processor was willing to seriously talk until after harvest
2006 crop picked out heavier than anticipated
Processors were inclined to pay $60/$61 not the $65 price we initially proposed

Those points were important, but by far the biggest barrier to concluding an early contract:

Ų Growers lost leverage by planting or sending seed to greenhouses without a contract

Looking beyond the early planting error 2007 was a success for the following reasons:

Growers across the state were willing to stick together and work for a state wide price
When bargaining ran aground in February, a number of growers stopped planting or sending seed to greenhouses
A large number of new growers joined the CTGA without whom this effort would have fallen short
2006 harvest showed many people the significant risk inherent in growing tomatoes which supported the view that $63 is not an unreasonable price

For my part, I would like to thank all the growers that supported the CTGA efforts.

The processors also deserve credit for their willingness to agree to $63 which will hopefully bring some profitability back to the farming side of the ledger after a long dry spell.

Harvest starts with a jolt:

The southern plants started this past week running 160,000 tons according to PTAB’s first weekly report
PTAB estimates 617,500 for this week. Based on field reports the industry will be at capacity in a couple of weeks.
Compared to the past 2 years 2007 looks very promising, but compared to the previous 5 and 10 years, it’s roughly in the middle of the pack.

Water Concerns still Cloud Horizon:

Initial reports from Kern and Kings Counties indicate good yields, but not without some problem areas.
Early growers are confident that they’ll meet their contractual commitment and a few appear to have excess
Growers with later delivery positions are not as confident for two reasons:

Some growers, Firebaugh south, lack adequate water due to permanent crop demand to finish the crop
If harvest gets backed up, tomatoes will need more water that may not be available

· Many southern growers will have a difficult time making plans for 2008 without knowing their water allocation. Northern growers are anticipating higher demand with processors south of the Delta looking to lock in acres with a more reliable water supply

CTGA Hires the Hale Group:

The CTGA Board agreed to contract the services of the Hale Group to assist in the following areas:

· Update the strategic planning work they performed in 2003

· Review CTGA current bargaining practices and industry best practices

· Develop a long range plan that will serve both grower and industry needs

Work will begin this month and you may be contacted for your opinions. The 1^st formal meeting with the Board will occur in mid September.

Best wishes for the 2007 harvest. Questions or comments please call.

Ross Siragusa, President/CEO

916-925-0225