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News

California: Larger tomato crop heads to canners

16/08/2018 - Ag Alert - 2018 Season
Mitchell Yerxa says he couldn't be more pleased with his 2018 processing-tomato season.

As harvesters made their way through one of his fields near Williams, Yerxa said he was looking at an average yield of 51 to 52 tons per acre, up from 45 last year. He's about halfway through harvesting his crop.

"That early, cool weather really was great weather for setting that fruit," Yerxa said. "Basically, the only thing that's different about this year is, all of our fruit pretty much ripened all at the same time. We had our first half pretty much ripe last week, and then all of our second stuff pretty much will be ready to go about the middle of August."

California tomato processors expected to have contracts for 11.9 million tons of fruit this year, according to the U.S. Department of Agriculture—a boost from the 10.4 million tons harvested in 2017, though down from 12.5 million tons in 2016.

Many growers are sending their fruit to the cannery still not knowing how big of a check the cannery will be sending back.

As of last week, six canneries had agreed to pay a base price of $73.50 per ton for this year's crop, and negotiations were ongoing with five other processors, said Mike Montna, chief executive of the California Tomato Growers Association.

Last year, an agreement on a base price of $70.50 per ton had been reached with nearly all processors in late April.

"As you know, every cost is higher," Yerxa said. "On one hand, it looks like a much better number, but the truth is, the margins are still pretty slim."

That goes for the canners as well as the growers, he added.

"I think there's just a lot of fruit out there on the market right now," Yerxa said. "They need the fruit to keep going, but they don't need the fruit because they still have a lot in inventory.

"You always know that prices are tight when you're this far into the season and you don't have a final-final-final price set," he said.

That uncertainty extends to Los Banos, where Aric Barcellos is preparing for harvest by the end of this week.

"The biggest worry, to me, is we're going into this season's harvesting, and we don't even have a set price yet," Barcellos said. "I hate to put seed in the ground without knowing what I'm going to get for it."

Barcellos said he ended up with about 50 tons per acre last year, and "if I can average a 52-ton crop, I'd be OK with that."

A late July heat wave interrupted an otherwise good growing season for Barcellos, who said his first fields look to be running about two weeks early.

"One thing about the heat—it might shut 'em down during the day a little bit, but they grow at night, too," he said. "The plants are working at night more now than daytime. They're kind of just conserving during the day and pushing at night."

Tomato growers and processors depend in large part on exports, primarily of tomato paste and tomato sauce, and Yerxa said they're casting a wary eye at the trade disputes that started earlier this year.

"We definitely think about it," he said. "Obviously, we are affected with tariffs, but as growers, there's not much we could do. The best thing we can do is try and make sure that we're producing the highest-quality crop that we can."

Montna said CTGA is monitoring the trade situation.

"We have concerns, like everyone else, as to how long and what impacts this will have on our industry," he said.

Another concern has been finding enough people to haul tomatoes from the field to the cannery. The usual signs have sprouted in tomato country, up to and including billboards along Interstate 5 and Highway 99, from trucking companies looking for drivers to handle the tomato trucks.

"The driver-shortage issue has been getting worse over the past few years," said Eric Sauer, vice president of government affairs for the California Trucking Association, noting that the problem is industrywide. "With ebbs and flows of the peak harvest season, it's problematic."

Many companies require new drivers to have at least two years' experience, Sauer said, noting the plethora of regulations—hours-of-service rules, electronic logging devices, and regulations disallowing interstate travel for drivers younger than 21—truckers and their employers must contend with.

"What happens with all these factors is, especially with the age restriction, you're losing drivers to other trades," he said.

Montna said he has seen the effect of the tight labor market on the tomato business.

"We need to get more younger people, whether it's college students looking for a good summer job, into it," he said. "I remember when I was in college, we had a lot of UC Davis students that would get trained and come back every year for four or five years while they were in college and drive trucks for our season."

An ongoing shortage of drivers, Montna said, could eventually lead to planting decisions based in part on the availability of transportation at harvest time.

For now, California tomato growers are thinking mainly about harvest and their margins after the harvest.

"I'd say it's a little slim this year," Yerxa said. "There is money being made, but it's not going to be a big money year."


Written by Kevin Hecteman, assistant editor of Ag Alert (khecteman@cfbf.com) and reprinted with permission from Ag Alert, publication of the California Farm Bureau Federation
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