July 25, 2007

Dear Tomato Grower:

In the current Tomato Bulletin: 

• Yields are above contract and some tomatoes are being left in the field
• Weekly volume approaching industry capacity
• Supplemental water breaches $700/AF
• Wolfsen’s hosts vapam application field trial for DPR 

Mild Weather Results in Big Yields: 

• Yields are generally running above contract causing processors to hustle in order to keep up with the crop. Reports of 50 ton + fields are common.
• Several processors are a few days behind the crop, but the mild weather has been a savior
• A small surplus market exists, but in general there is no surplus capacity nor processors interested in getting any further behind the crop
• Some fields have been left un-harvested, but no reports of any disking
• Solids are running a bit lower than previous two years which is not surprising given overall yields.
• Opinions are mixed on whether yields will fall off over the next 2 weeks due to immature fruit.

PTAB Projects 943,000 tons to be processed this week. 

Compared to 2005 & 2006 it seems like 2007 took off like a rocket, but volume is only slightly greater than the previous 8 yr average. 8 yrs is used to include 1999 which had record production. 

 Water market stays tight and very expensive:

 Although to the casual observer water may appear plentiful, pricing topped $700/AF this past week in Westlands Water District for a small quantity. While most growers feel that they’ll be able to get through 2007 relatively unscathed, there are serious concerns regarding 2008: 

• The State Water Project is forecasting a 17 – 22% allocation if it’s dry and 48 – 64% if it’s normal whereas the San Luis Mendota Water Authority is forecasting 25 – 35% and 55 – 65% respectively.
• Many growers are budgeting a 25% allocation. Its too great a risk too take a more aggressive position given that a 25% allocation will result in supplemental water at $500+ which only permanent crops could afford in order to finish or save the crop.
• A 25% allocation translates into 0.7 AF vs the 2.6 – 3.0 that tomatoes require.

Faced with this scenario what’s likely to happen? Here are some options that are being discussed: 

1. Put up beds following harvest with no inputs and wait to see if the water supply improves or if the 2008 tomato price gives them enough incentive to plant.
2. If no tomato price is established in early fall some acres will be diverted to winter grains – an attractive price, lower risk and less water requirement
3. If water is in the $500+ range, water will be sold and some land left fallow

Bottom line, its hard to paint a scenario which doesn’t involve a reduction of acreage in the south. By the time allocations are known, it will be too late for many operations. All this will happen at the same time that Boswell’s new plant is scheduled to come on line; an interesting dynamic… 

Wolfsens Host Vapam Application Demonstration for DPR 

Last week John Woodruff from Wolfsens put on a demonstration at Wolfsens Ranch for 10 representatives from DPR on how the spray blade works and why its use poses minimal offgassing risk. Chuck Rivara from CTRI and Pat McCaa from Del Monte also attended. This was a follow up from an earlier meeting with DPR and the 20+ questionnaires that were submitted by growers. 

DPR was favorably impressed by the demonstration and the grower responses. DPR is looking forward to seeing an application under normal conditions this fall.  

There is a reasonable possibility that the spray blade application will now be exempted from new regulations. I would like to thank Wolfsens and all the growers who sent in responses. 

Questions or comments please call Ross Siragusa at (916) 925-0225.

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