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News

The 2022 Tomato News Conference: interview between Martin Stilwell and Mike Montna

13/12/2022 - Sophie Colvine , François-Xavier Branthôme

Transcript of interview between Martin Stilwell and Mike Montna during the 2022 Tomato News Conference held in Parma on 25 October 2022

Martin Stilwell:
I think and I may be shot by the Californians, but I think the price next year is going to rise, I am not going to ask you by how much. Do you think more acres will be planted next year?

Mike Montna:
Yes it's a great question, we debate this a lot. You know, looking even back at some of Mark’s charts, one thing that's different is since 2014 to now it that we've had a million acres that used to be open raw ground going to permanent plantings and so the available acreage that’s out there is less to draw from. You look back in 2014 when we had a 17% increase in price from 2013 to 2014 and we went up to 305,000 acres I think up a million times like that. The industry could respond that what you're seeing now in my opinion is we've had kind of multiple problems but all interrelated. We obviously have the drought so that gives the grower less acres to plant on, with less because he has less water available but also what we're seeing is other crops. I mean that I think the elephant in the room, aside even for us in California, is what's the right price versus the relative risk of return. Because tomatoes for us have become a riskier crop year by year. If you look back 9 or 10 years ago at our NASS estimate, if it said 12.3 we came in at 12.3 pretty darn close to the tons breaker and now you're seeing that we've had one good crop, in 2018, and since than 5 or 6 bad ones. So, what you're seeing is with that variability, it's bringing in a different piece of the conversation. If you look around the room at the age of our growers, the new generation doesn't remember the day that tomatoes may have saved the ranch 25 or 30 years ago and that it's good to be diversified. Their experiences is that it is a very difficult crop, yields are going down, costs are going up and we are spending $5000 to make X and we have other crops that we can spend $3000 and make the same amount. God why am I doing it? why are we looking at this in that frame? So there's not only a price to compete with the other crops but almost a price to compete with itself because it's a different look than what I think we would look at five or six years ago.

Martin Stilwell:
Now we hear that the price, we have heard for many years, that the almond crop permanent planting, the other nuts in California have expanded very significantly and they ate into available acres which otherwise were planted to tomatoes. Recently, if we look at prices for almonds and walnuts, and taking just two of the nuts, the prices have dropped very significantly so will that help in making more acres available for tomatoes?

Mike Montna:
It's a great question, we debate this and try to decipher this ourselves. I think potentially yes. I mean, I think in the southern part of the state as it is where the water scarcity is more intense, you'll probably see almonds potentially come out this year and it's just because we're in the third year of a drought. Last time we had a drought and almond prices were $4 plus a pound, you could afford to spend $2000 an acre foot for water and kind, you weren't happy about it, but you could justify that to keep those trees alive and actually make money at it. I think on the margins you might see some more water for row crops and but it's going to depend on what row crop makes the most sense, but I think overall let's just say a grower that has 2000 acres of almonds if he pulls out 500 acres it's to keep the other 1500 alive with his well water and allocation, so he probably, unless he goes to zero and then that's creating a really a new row crop acre source, he's going to be pulling out an amount to adjust to the water let's say the water footprint that he has for crops.

Martin Stilwell:
Another point which is very obvious if we look at this left-hand graph here, we see that from more or less 2004/2005, yields rose consistently and strongly basically from 35 up to above 45 but then with probably natural ups and downs, it's basically been flat. Why? Could you explain? Can you give us some ideas to what's happened?

Mike Montna:
Yes, there's a quite a few and I'll go over a few.
I think some of it is you know with drip irrigation, back in 2008, we were right around 30% now we're 97-98%. Drip is a great innovation for the industry, it's allowed us to get better yields, more sustainability but the other thing is it changed our rotations. We don't rotate like we used to, so we are seeing more disease pressure. Those diseases spread throughout the state a lot quicker than they used to, maybe 15 or 20 years ago, that's one thing.
Well water, we're using a lot of well water. I think our ground in some cases is getting tired.
And our weather, the weather is the other piece. Over the last three or four years and at the grower meetings I had recently, I kind of finally just said look, we keep talking about these weather events, whether it's 4 inches of rain in September or 116 degree-days, I mean the thing that's going on is we're having the let's see the heat that we had about September 8th was the hottest day on record ever. Not in August. Not in July. In September, the rain that we had last year in October, we weren't quite done yet, it was about October 20th was the largest single day of rainfall ever. Not in January. Not in February. And so we're having our summers are getting a lot hotter and the heat spells are lasting longer and so we're planting in a lot hotter conditions, tomatoes are blossoming in a lot hotter conditions and that's having an impact on yield too. From a grower's perspective, it's really hard right, because you almost can't put a percentage on risk: is it 10%, is it 8%, is it 40% riskier? But it has gotten a lot riskier. We felt it. I think a grower in 2014 put a transplant in the ground and he had a pretty good idea what was going to happen if Mother Nature 80% cooperated. You know now we need 100% cooperation and even then, there's going to be some variability so, you know, I tell our growers now, what kind you know it's we're going to get hit with crazy weather every year just count on it how you deal with it will be the separator. We need to kind of learn more and figure this out but how we adjust, how we deal with it, just kind of pretending like it's random like we used to, it's happening. I don't know if it's doing any of us a service, it's more of ‘OK it's coming what do we do’ I think that will get us better situated for the future.

Martin Stilwell:
You talked about drip irrigation and rotations. In Europe, we have our drip irrigation on the surface. Would it be an idea, in California you are essentially locked into the same land because you have buried drip, whereas you have a lot of land available because the amount of land which can be grown to tomatoes is effectively set by the availability of water. The use of surface irrigation potentially could allow you to move and rotate more and maybe recover some yield.

Mike Montna:
No, I think from talking to growers, they're looking at that now, but they just have this kind of huge investment in the system and you know how these industries are, right, we're like battleships you turn the ship and a few years later you can see it start to turn and you start to make those adjustments. But that is I think something people are looking at. We've gotta figure out a way as an industry and I'm just gonna assume other places are the same. To get this next generation going out ‘I wanna be a tomato grower’, because really all we've shown him is hardship and low margins the last five or six years. For us, it's because tomatoes are a lifestyle also. I mean if you're farming almonds they are a perishable too but if it rains it's not great but if it's a little rain on them you know you'll be OK. You get some rain on some tomatoes and you're stressed out. Most of the growers that we have that really do achieve those higher yields, they're out in that field every day, there's no kind of being gone. I mean it's an intense crop and it's just gotten harder.

Martin Stilwell:
One other point, and I don't want to get too technical for the audience, but do you still or do you continue to have a serious problem with fusarium race 3 because it could last once it's in the soil it's a problem and you're locked into the soil because of the buried drip?

Mike Montna:
No, we need the resistance and even that's questionable but there's some areas that you just can't continue without that and it's grown pretty quickly that I think that's catching a everyone a little off guard and I don't know the exact reason. Our industry is a little more homogeneous than it used to be maybe 30 years ago. We have more custom transplanting, custom harvesting, so equipment actually moves throughout the industry a lot more than they used to. But there is some. Unfortunately growers usually learn the hard way, they try a variety and next year everything changes.

Martin Stilwell:
OK to talk about more delicate issue, which essentially I think must cross everybody's mind is ultimately everybody responds to price and profit, but would a very significant rise in the price of tomatoes actually cause more acres to be planted?

Mike Montna:
Yes, I believe so, I absolutely think so because I tell people why would I put $5000 on a boomerang and throw it and hope to get 700 back when I could put $3000 on a boomerang and throw it and hope to get it back? I mean our guys have a history of responding when it makes economic sense and responding hard. We used to be more concerned about overproducing, right? I mean you look at any commodity in California's history and if you threw the right number out there, if you build it, we will come and we've had that ability so I think we do have a drought but we have choices. But you have to say:” why should I plant that instead of the onion, the garlic, the Pima cotton?”, and I think our guys still like to grow tomatoes. They have a fondness but the economics are such with the other, like when you look at almonds, in some cases where almonds were profitable, now they might be a troubling factor on the ranch so everything that the row crop does even becomes that much more important. Not that tomatoes are subsidizing almonds, but from an entity standpoint I've got to make sure that my return per acre foot is lined up because I don't have the luxury for a mistake so yeah absolutely. We have a history of doing it, up until two years ago when I would have discussions with some of the processors, I've always been able to find my acres and I try to, I mean I'm honest, I'm a realist, so I would say yeah I agree with you, but it's true until it's not. and when it's not, if we ever find out we're not, it's too late and that's where we are now. We're trying to catch up to what is that I think right number going forward.

Martin Stilwell:
Yes, it's a difficult situation for us all. I talked before about destruction of demand because of price, on the other hand, if we don't have the product, we're going to destroy demand anyway.

Mike Montna:
I mean we talked about that also. If you could make more on other crops with less risk, I don't know how we can artificially fix it, because we won't be successful if we don't get the price right to get enough acres, we will only get the acres that whatever that market may be anyway.

Martin Stilwell:
OK I think we've gone as far as we can go so I would ask that all the speakers who were with us earlier could join us here and then we'd open for questions from the audience and maybe the audience can help us along this path of dealing with this difficult issue for us all.

Some complementary data

Tomato News Conference 2022 Martin Stilwell & Mike Montna

Tomato News Conference 2022 Round Table

Source: Tomato News

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