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Extremadura: agreement on 150 Euro per tonne for the 2023 harvest

17/02/2023 - François-Xavier Branthôme - 2023 Season
The Spanish press reported on February 15, 2023, that growers and processors had agreed on a price of EUR 150 per (metric) tonne of tomatoes for the 2023 season in Extremadura. Planted surfaces dedicated to processing tomatoes are expected to cover around 20,000 hectares, up from 18,700 hectares during the 2022 season.

An agreement has been reached between tomato growers and the processing industry in Extremadura. For the next season, the average price will be around EUR 150 per tonne, compared to EUR 102 the previous season and EUR 78 two years ago. After intense negotiations, the agreements between growers and processors were finalized on February 15, the deadline for filing contracts with administrative authorities.
"For growers, these 150 euros are a very good, excellent price. For processors, this means that we must now face up to the competition, who are coming in force this year," says Manuel Vázquez, General Manager of the Conesa Group.

 Manuel Vázquez is making reference to the prices paid by manufacturers in other competing countries, which could be around EUR 75 per tonne in China, EUR 140 per tonne in California, and potentially – the final conclusion had not yet been reached at the time Mr. Vázquez was speaking – EUR 135 to 140 per tonne in Italy, "with an expected increase in production in all cases."

Last January, Cooperativas Agro-alimentarias Extremadura published a study on the production costs of processing tomato cultivation in the region, based on information recorded during the last season, during which 1.5 million tonnes were harvested. 
To carry out this study, Cooperativas Extremadura took into account the direct and indirect costs incurred by Extremadura growers for their processing tomato crops, which increased by 27.4% last year. Going into detail, the study shows that direct costs increased by 31% while indirect costs, including labor, increased by 19.5%.
This study, carried out with the collaboration of the Fruit and Vegetable Producers' Organizations (OPFH) of the Autonomous Community, puts the production cost of each hectare of processing tomato at EUR 11,448, which represents a cultivation cost of EUR 138.85 per tonne, taking into account the average yield obtained last year, which amounted to 82,450 kilos per hectare. 

For its part, the cooperative group Acopaex (Tomate del Guadiana), has underlined that these EUR 150 /mT is double what was paid in 2021, a level that was reached after a "very significant increase in costs last year, in parallel with a sharp decline in production." "It's a good price for the grower," added Mr. Fernández, who pointed out that "tomato products are still a cheap product on supermarket shelves and there is still uncertainty about what will happen in five or six months." 

Bartolomé Martínez, manager of Casat, a leading agricultural processing company in the tomato sector, says that EUR 150 "is an important figure because it represents a significant increase. What we have to hope for now is that there are no jolts or incidents that could jeopardize what looks like a good year for the crop so far."

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