Profitability. That is the main goal of tomato growers in 2013, both for fresh market growers in Florida and in the processing industry in California. In the Sunshine State, growers are hoping for a workable agreement with tomato producers in Mexico, while those in the Golden State are expecting
reasonable prices from processors.
In September, the U.S. Commerce Department noticed an intent to end a 16-year tomato trade agreement with Mexico that Florida tomato growers said set a low floor price — below the cost of production — for tomatoes coming in from the neighboring country (See “Florida Tomato Industry At A Crossroads” on www.GrowingProduce.com.)
According to Reggie Brown, executive vice president of the Florida Tomato Growers Exchange, U.S. tomato growers are still in the process of completing a Change of Circumstance Review and the Commerce Department has preliminarily ruled in favor of the domestic industry.
“This ruling will allow the domestic industry to withdraw the old case from 1996,” explains Brown. “That would bring about the end of the current suspension agreement, if in fact the dumping was a practice that was prevalent in the tomato industry with product coming from Mexico.” At press time, however, the process had not been completed.
(UPDATE: As of Feb. 4, domestic tomato growers indicate support for revised suspension agreement. CLICK HERE to read more. )
Acreage Down; Technology Up
In addition to the trade agreement battle, Florida tomato growers have seen a decline in acreage over the last few years. Even with the acreage reduction, Brown says growers have been shipping close to 50 million boxes of winter green tomatoes on an annual basis. “The varieties and the technologies were such that the yields were still adequate even with the reduction in acreage,” he adds.
It all comes down to unit cost, explains Brown. If yields can be produced on fewer acres, less money will be spent per box which leads to potential profitability. “The goal is to see higher yields using fewer acres to satisfy demand without spending the $10,000 it now takes to produce one acre of tomatoes,” he says.
How are Florida tomato growers producing more on less land? Simply put, they are able to pick tomatoes more than once per season, thanks to the varieties used. “I had a conversation with a producer in North Florida who indicated that he was going to try to pick a fourth picking of tomatoes, which is fairly unusual,” Brown explains. “Normally we get two good pickings and sometimes we will pick them a third time. If in fact you can consistently get second and third pickings off these crops because of market demand, the cost of the acreage remains but the cost of each box harvested goes down as the number of boxes goes up.”
Brown says his instincts tell him that acreage will be down slightly in Florida this year but there is an opportunity to harvest and sell the crop at a price that will ensure profitability, especially if large quantities of tomatoes from Mexico are not being dumped in the U.S. market at the current price under the suspension agreement.
“In reality, though, this only a foggy gaze through a cloudy crystal ball,” he concludes. “Without some change in the scenario, tomato production is an extremely tough business to stay in.”
West Coast Production
On the other side of the country, 2012 proved to be a good year for California processing tomato growers and the hope is to see a repeat in 2013. Bruce Rominger of Rominger Brothers Farms, Inc. in Winters, CA, a grower of about 800 acres of processing tomatoes as well as field crops, says he had a decent year and overall it was a better than average year for processing growers statewide, as adverse weather was at a minimum in 2012.
Rominger, who is the secretary/treasurer of the California Tomato Growers Association, says it is usually a wet spring or an early fall that can lead to disease pressure. “During the last few years, though, many growers have been able to dodge that bullet,” he adds.
Known factors that will impact profit this year include rising prices for fuel, fertilizers, seeds, and land. “We are trying to increase the price a little for this year so we can get paid more for the tomatoes,” he says.
An optimist, Rominger adds that he is confident the industry will settle with processors and get a reasonable price for tomatoes this year. He also says that because of a shortage of processed tomato products around the world, that should help increase profits for California growers and processors.