CTGA Tomato Bulletin

September 14, 2004

Dear Tomato Grower:

Where’re we at?

· Processed tons likely to reach 12,000,000 ton level – roughly 10% above expectations.

· PTAB projects that processed tons will reach 9,829,581 by the end of the week

· The percent of net paid tons for canneries is averaging 94.7%. Based on a $51.00 base price this equates to a $48.30/ton.

· Some surplus tons are now being disked. Those who could find outlets will be paid $25.00 less freight next June which equates to a present value of the fruit of roughly $15.50/ton before harvest expense and discounts.

Where’s the windfall from the bumper crop?

· The canners contracted 11,000,000 at $48.30 another 1,000,000 selling at $15.50 with another 2% being disked which results in a weighted average of $44.63/ton.

· Bottom line – no windfall for the grower.

· Custom harvesters, canners that could take discounted surplus tons, and marketers will benefit.

If you’re going to disc tomatoes please consider the following:

The costs of disking excess tomatoes can be lowered by feeding them to sheep.

The director of the California Wool Growers recently brought to our attention that tomatoes are the preferred grazing material for sheep this time of the year. Apparently sheep producers find that their ewes have an easier time lambing after grazing on tomatoes. Lambing will take place around the 1^st of November.

Key Information:

· Sheep will convert the tomato plants into an available nitrogen source and might save you a tillage pass across the field.

· Sheep producers will pay a grazing fee on per head basis – approximately $15/acre.

· There are sheep producers interested in tomato acreage throughout the state.

· The sheep producer sets up a temporary electric fence and manages the sheep.

For more information give Adam McCarthy a call – (209) 478-1761 or (209) 603-8708 cell.

2005 Issues:

· Don’t expect canners to be looking for much more than 9,000,000 to 9,500,000 tons next year. This means acreage will be cut, so growers need to look for alternatives.

· High water costs and tight supply are likely to force growers in the south to cut back.

· In the north growers are planting “early ground” in permanent crops.

· Growers with ample water are taking a hard look at alfalfa.

· The big crop and large offshore production will reduce paste and canned product prices.

· The industry is in desperate need for a pickup in demand. The CTGA’s promotion campaign starts this fall, but needs more support.

Who’s making the money?

Over the last 10 years:

· The Grower’s share of the retail value decreased by 31%.

· The Processor’s share of the retail value decreased by 63%.

· The Finished Product Handlers share of the retail value increased by 84%.

This chart was constructed using data on the average annual tomato in-field price, paste price, and retail price. For simplicity the processed tomato marketing chain was divided into three groups; growers, processors, and finished product handlers (including retailers). The chart depicts how each of the three groups have done relative to one another, in terms of percentage share of retail value. For example, in 2003 the average retail price for processed tomato products was 91 cents/lb. A whopping 69.1% of the 91 cents went to finished product handlers, while processors received 14.4%, and only 16.5% got back to the grower. (Sources for chart: CTGA, California Agricultural Statistics Service, The Food Institute and The Morning Star Packing Company. All figures were converted to 2003 price levels using the Consumer Price Index.)

Processed Tomato Foundation resurrected:

Due to increased inquiries from major customers, the PTF is being reformed to develop a Tomato Grower’s Workbook which will help growers better manage input usage and develop sustainable agricultural practices. The workbook will also be a good tool for benchmarking farming practices. Initially two small grower groups will be established representing northern and southern growing regions. Interested growers please call the CTGA or Chuck Rivara at CTRI.

Conservation Tillage:

The first annual Western States Conservation Tillage Conference was held on September 8^th & 9^th at the UC West Side Research and Extension Center in Five Points. The conference gave an excellent overview of the ideas and practices surrounding conservation tillage (CT). A considerable amount of information was presented on CT practices for tomato production.

Research data was presented from a trial where CT has been used in a cotton and tomato rotation for the past four years. From an economic standpoint the tomato results look very promising. CT resulted in a yield increase of approximately 8 tons/acre ($400 increase at current price) over tomatoes grown conventionally, costs between CT and conventional were similar. The CTGA has more information in this study. Thank you to all of the CTGA members who attended the conference or were cooperators, it reflected very positively on the tomato industry.

CTGA Technology Seminar:

Members please save December 8, 2004 for discussion on drip, moisture monitoring, GPS and other Precision Farming developments.

Vapam Update:

The CTGA has been in touch with the DPR in order to make sure that tomato growers concerns and cultural practices are considered before mitigation measures are introduced. The data we collected from growers has been submitted and we will be part of the dialogue. Paul Gosselin – acting DPR Director – assured the CTGA that no measures will be implemented prior to late 2005 or early 2006. In addition, there may be an opportunity for spray blade applications to be exempted since there is no off-gassing data and applications take place during cool temperatures.

Olympic Silver:

Chuck Cox’ daughter Alison won a silver medal and set a world record participating in the Women’s Eight Rowing Competition.

Comments/questions (209) 478-1961 or rdsiragusa@ctga.org

Ross D. Siragusa

President/CEO