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California: increased demand is putting some extra pressure on tomato crops
- François-Xavier Branthôme
“…the first year tomato processors have not been able to contract all the tons they need”
According to California press (May 8, 2021), Kraft Heinz plans to increase the production of its single-serve packets of ketchup by 25%.
But with the increased demand for single-serve ketchup packets, processing tomatoes are now in short supply, which is putting some extra pressure on crops here in the Central Valley. "Just trying to get that many little packets put together for all the fast-food chains throughout the country, it’s demanding," said Don Cameron, the general manager of Terranova Ranch, near Helm, California and member of CTGA Board of Directors.
Fresno County grows about a third of California's processing tomatoes, which are used in things like pasta sauce, pizza sauce, and of course, ketchup.
According to Cameron, the price of processing tomatoes has risen about 8% over the last year. "So this is the first year that the tomato processors have not been able to contract all the tons they need," said Cameron.
Cameron says things are going to get tighter before they get better. "I think you’re going to see prices increase," said Cameron, "Anytime you have a shortage in anything, you tend to move the price up because of supply and demand." Processing tomatoes are versatile and end up in a number of different products, but especially ketchup. "With the restaurant trade opening back up, we’re seeing an increased demand there," said Cameron, "This past year, a lot of it has been on the retail side, demand was extremely high."
Single-serve ketchup creates tomato crop demand
With an increase in demand and a shortage of water, Cameron says this year will be a squeeze and it doesn’t stop there. "This is going to be a multi-year event," said Cameron, "So hopefully we'll have a strong crop this year that will help supplement the supply."
Farmers are waiting to hear more about the possibility of new groundwater regulations next year, which might require farmers to reevaluate their water distribution. "We have a lot of almonds and pistachios that require water every year and a grower gets a better return from those," said Cameron, "So if things get really tight, the water is going to go to the crops to keep the permanent crops alive for another year and tomato acreage could shrink in the future."
California's lack of water has the potential to limit the number of tomatoes grown by farmers, which would drive the cost of tomatoes up even further. According to Cameron, processors are already interested in discussing next year's crop and pricing.