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September 19, 2006
Dear Tomato
Grower:
In the current
Tomato Bulletin:
- Harvest volume
continues to slip as affects of July heat being felt
- Growers in Five
Points and Firebaugh firm at $65, but if crop comes in below 10,000,000
they will want more
- Industry sources
project crop to be closer to 9.5 million
- Tomato Products
Wellness Council launched to get out the positive health message for our
products
2006 Harvest
Update (through PTAB’s Sep 23 Estimate): 
-
Harvest projected to reach 8 million
tons by Saturday September 23.
-
Similar to the last Bulletin,
the crop still trails the ’99-’05 average by 1.4 million tons and 85% of
the average.
-
Growers on average are 10% below
contracted tonnage and anticipate the situation to worsen.
-
Processors have cut back processing and
we will see temporary closures due to a lack of ripe fruit. The question
is whether the late fruit will ripen sufficiently to justify reopening.
Most Industry observers project crop to
reach only 9.5 million tons:
A 9.5 million ton crop would put the
market in a supply squeeze. Why?
·
Carry out inventories will
be well below 2 million tons – lowest in more than 10 years.
·
Imports will be required to
meet paste customer needs. Worldwide supplies will be very tight so
imports will only provide limited relief.
·
In 1998 the carry out was
2.2 million and paste prices climbed above $0.45 ($0.56 adjusted for
inflation!)
Regardless of the final crop number,
supplies will be very tight so the market should anticipate high tomato
and finished products
prices.
Five Points
and Firebaugh Grower Meetings:
Last week CTGA
organized grower meetings in Five Points and Firebaugh. The issues that
came up were as follows:
- Five Points’
growers support a minimum $65 per ton plus $3.00 early season premium.
Growers recognize that early tomatoes will be in high demand and 11
different processors want their production. Since processors have been
unwilling to discuss pricing for 2007, some growers expressed interest
in auctioning early acreage.
- Firebaugh growers
strongly supported a minimum of $65 based upon a 10 million ton crop. If
the crop is smaller, they expect a higher price.
- One grower
suggested that the CTGA should be asking the question of “what level
will growers not grow tomatoes?” I don’t think this is the right
question because it ignores tomato market conditions. Tomato growers
need to have an opportunity to be compensated for their risk and make a
profit. 2006 will result in yet another year where profitability will
elude most growers. Conditions support higher pricing so we need to for
work it. In an oversupply situation, the grower’s question is more
appropriate.
CTGA Tomato
Industry Roundtable – September 13 & 14:
CTGA in conjunction
with UC Davis hosted a tomato industry roundtable meeting last week.
Representatives from the following organizations attended (note all
processors were invited):
JG Boswell
Bolthouse
Campbell’s Soup
ConAgra
Del Monte
FDA
Heinz Ingomar
Kagome
Los Gatos
Morning Star
OPC
Seminis
SK
Unilever CTGA
CTGA Directors
present were Aaron Barcellos, Jim Beecher,
Don Cameron
and Bruce Rominger.
Top tomato
researchers attended from Harvard,
Penn
State, UC Davis, UCLA and University of
Toronto.
The outcome was the following:
- Creation of the
Tomato Products Wellness Council. The council’s mission is “To
increase the consumption of processed tomatoes through facilitation of
pertinent collaborative research and generic communication”.
- The council will
fund research that will provide compelling medical support for increased
process tomato consumption which will be communicated through targeted
public relations.
- At the conference
Dr. Britt Burton-Freeman from UC Davis distributed a CTGA funded study
that she and her colleagues at the Department of Nutrition put together
which is a summary of all research on the medical benefits of processed
tomatoes. The summary includes more than 200 abstracts looking at the
role of processed tomatoes in combating diseases ranging from prostate
cancer to heart disease.
- Given all the
existing research, the logical question of “whether more research is
truly necessary” was raised and whether the Council should pick selected
existing studies and build a PR campaign off existing data. The reasons
for supporting new research included the following:
- Successful
campaigns require new news not old retreads. The Almond Board, for
example, has many targeted on-going studies which is why almonds are
frequently in the news.
- There are
legitimate gaps in the studies to date. For example, most look at
cancer as opposed to cardiovascular disease. Unfortunately, cancer
claims are a very hard sell since the National Institute for Health
accepts few cancer bio-markers. (PSA for prostate cancer is not an
accepted biomarker)
- The researchers
reviewed the data and concluded that the Council should consider two
studies that would be a collaborative effort between two or more
institutions looking at the following:
- The cardio
vascular benefit from consuming a diet high in tomato products vs.
low in tomato products over a nine week period
- The short
term effect of tomato consumption on cardio vascular disease
biomarkers
- The cost of the
study is approximately $330,000 (plus university overhead). There will
be some additional public relation expenses, but in total it is not
expected to exceed $600,000 (roughly $2.00 per processed tomato acre).
The attendees recognized that two studies by themselves will not
dramatically change demand, but it’s a long overdue start.
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Questions or
comments please call (209) 478-1761.
Ross Siragusa
President/CEO |
