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October 12, 2006

Dear Tomato Grower:

In the current Tomato Bulletin:

  • Barring poor weather, crop should exceed 9.5 million tons but shy of 10.0 million.
  • A few growers are committing unpriced acreage at “2007 CTGA Price”. This is a mistake if growers really want a minimum $65.
  • Processors and Growers are signing up to support the Tomato Products Wellness Council
  • Reminder: Insurance lapses Oct 20
 

2006 Harvest Update (through PTAB’s Oct 7  Estimate):

 

 

 

 

 

 

 

 

 

 

 

Harvest volume at 8.96 million tons through Oct 7:

  • PTAB projects 9.33 million tons to be delivered through Oct 14.
  • 2006 trails the previous 7 yr average by 1.27 million tons.
  • Based on unharvested acreage crop should top 9.5 million, but fall short of 10 million

If growers want a min of $65, don’t sign an unpriced contract even if its tied to the CTGA price 

During the past week rumors cropped up of savvy field men signing a few growers for 2007 at CTGA price. For the processor this is a good strategy but not for the growers. Why? 

  • Regardless of 2006 production, processors will need to expand acreage. Inventory levels will be at the lowest levels in more than 15 years.
  • Processors will be especially keen for early tonnage because their customers will be clamoring for product. Kiss an early season premium goodbye with an unpriced commitment.
  • Processors feel that they can get as many acres as they want at $60 - $62. An unpriced commitment will make that happen.

There is no need to sign an unpriced contract because:

  • demand will be higher
  • acreage will be more valuable, especially for early and late positions
  • processors will only increase their price ideas if they have to work to secure acreage

The only reasons to sign an unpriced contract would be if there is a legitimate risk of losing a tomato contract, the price is not important, or there is no interest in different terms. 

Tomato Products Wellness Council (TPWC): 

The TPWC, which was established last month to fund targeted research and promotion, is off to the races. The following organizations have signed up. 

Paid dues:                                                                   CTGA                          Morning Star

 

Verbal/Written Commitment:                                      Campbell’s                  Heinz

                                                                                    Ingomar                       Los Gatos

                                                                                    OPC                            Ontario Tomato

Growers:

                                                                                    PCP                            Rio Bravo

                                                                                    SK                               Unilever

Insurance: 

  • Insurance lapses October 20 so be sure to call your claims adjuster prior to the 20th if you plan to make claim as a result of rain or the heat wave
  • According to the USDA Risk Management Agency damage the heat wave is claimable. Be sure to discuss with your agent options available.

Questions or comments please call (209) 478-1761.  

Ross Siragusa

President/CEO

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