First question: so could you please introduce yourself and your organization to whoever wouldn't know you already?

My name is Mike Montna, I am the President CEO of the California Tomato Growers Association. The Association has been around since 1947. One of our primary roles is negotiating the price every year. We also represent the growers, state and federal lobbying, trade, anything that impacts the growers, with any government Agency , working on crop insurance, working on other disease, pest pressure with state organizations. I've been here since 2008. Prior to that, I worked in politics right out of college and I worked on the fruit processing side for 10 years before I came over to CTGA.

And if I may ask how big is CTGA, how many people are working for CTGA and how many growers do you represent?

There's only two of us. We have about 157 growers. I think you know we usually look at it by tonnage and we're right in that 64% of the growers. It's a voluntary organization, so each grower volunteers to be a member of our organization. I work for a board of directors; the board is made up of growers in different districts throughout the state and so they are elected by their neighbors, friends, colleagues and I make recommendations and they make decisions, on all the relevant issues. 

So about California, the season finished just a few weeks ago, so could you please describe from your perspective how it went? 

Overall, given the weather that we had, it was a good season, for we were about 4% off I believe of the May estimate. I believe it was an 11.5 million (10.4 metric tons) estimate; we ended up right about 11 million all in short tons (about 10 million metric tons). We had really mild growing weather which is good from planting time until right about the middle of June. And then from the middle of June, we had really high temperatures. It got really hot in June, July, part of August where we had 110 degrees F (43 Celsius) plus for multiple days in a row. So I think we were probably concerned at some point that the crop was going to break down faster, not hold up as well. So we kept watching every week, how are we doing, okay, this week's good and how next week will be,  it still looks like it hasn't changed a lot. If you had asked this August first, would you get 11 million tons, we probably would have said: I really hope so but boy with that heat it would be difficult. We did see more impacts on the heat later in the season, in the September crop, due to the fact that it was at different stage of development, more blossoms happening, a lot more susceptible to the heat so the crop that we harvested in September was impacted overall, but at the end of the day we were really close to  our five-year average. I think we're right about 48 tons per acre for this season, our five-year average is somewhere around 47.8 or somewhere in that range so it ended up being a normal kind of crop year. Solids were good, we did have some color issues with the heat, just trying to get the maturity right. At some point the fruit wants to stop and try to survive and so we had some issues with maturity that we dealt with throughout but that's pretty much due to the heat but it was an overall okay year, it was fine.

Were you expecting such high temperatures?

Never! California can get hot, it always has a different heat than maybe you have. It's a dry heat, not as humid, but it's hotter and longer than maybe 30 years ago, where 107 Fahrenheit (41 Celsius) might have been considered hot, but now we're getting 115s, 114s (46 Celsius) you know those so it's hotter and hotter longer. So I think we're just seeing  bigger variations between highs and lows than we used to see. And so I think that's why it's always a little deceptive sometimes when you look at averages, because I tell people four and six and zero and ten both average 5... I'd rather live in that four and six range and average five than that zero to ten, because one means I'm freezing and one means I'm burning up right; but it's still five average so that's why we kind of look at it a little differently but it overall it was it was it was a good year. 

Compared to last year, there was a reduction in the production, so what were the reasons for that? 

Last year, obviously globally and even here in California, we've been short the last few years really prior to 2023, inventory levels very low so we were packing a crop that kind of tried to rebalance that. Looking back on it, we're still kind of dealing with the Post covid effects on the marketplace and then how things are shaking out. So at the same time demand was very high during covid for our products and we're still adjusting with where people are eating, how people are eating, how it's changed... And so at the same time,  we believed we needed this kind of crop to get people the product that they say they want and we also need to replenish some of the inventory. So then while that happened, we had weather that allowed us to harvest that crop. It was a very risky crop last year, I think in some cases, none of us probably thought we would get it all in, we almost harvested half the crop after like the 15th or so of September, which is kind of unheard of for us, very little in July so there was a piece of that too, where we were probably overall anticipating maybe little lower yields and being a little more difficult than it was. It was a very tough crop to harvest but yield wise it actually performed well so I think it's a combination of being short in the prior years, contracting what the market said they needed, but at the same time market demand slowed down from the Post covid kind of settling out.

Given the US situation, the right thing to do, the prudent thing to do, and I'm all in favor as reducing acres, let's just process what we can sell, that's the only way you can keep a healthy industry in today's climate, don't try to overproduce and pack your way to prosperity. You've got to make the right decisions...

Well talking about overproduction, let's talk about China and what has been the effect of the increased global protection, potentially, on California growers?

China has increased their production; when I look around I'm not sure why, I don't think it's based on market demand necessarily. I think there's other factors at play,  as to why it's being produced. Here in the United States we know we have a big domestic market and we have the UFLPA/ labor prevention act, so really, we're not getting  Chinese product into the U.S. due to that act and even prior we really weren't getting a lot of tomato products anyway, because of the competitiveness at the time. But since that time, that act is in place, so it does give us a little protection from cheaper products that aren't kind of competing on this same economic environmental level that we're having to adhere to. So I think from our perspective, how it's impacted, there's probably some export countries that we just won't be competitive to, that maybe we have in the past and we're just going to have to reduce our pack and adjust accordingly. I mean, you're not going to win a battle of prices when the cost difference and regulation requirements are so much different, so we have to be smart, export to our training partners that value the quality and the environmental responsibility and all the other things that go into our product.

So you're not too worried about it?

I don't know if worried is the right word. I'd say, they can pack whatever they want and we can't control what they do, but we can control what we do. And so as long as our industry reacts by reducing tons and areas where we're just not going to be competitive or they're not valuing what our product is and bringing to the table; that's what we can do. And so, it's not that I'm worried or not, it's, here's what they're doing, they're fully able and free to do that, but here's how is our industry going to react and I think it's by reducing tons and providing global partners that, as I said, value what our product is and what it brings to the table, grown the way it is, and delivered and packaged the way it is, they will I think continue to some degree to support that...

Well I heard the same from an Italian processor that I interviewed recently, that they say, you know when you play with high quality, when you focus on sustainability, ethical production, things like that, then you're not directly competing with tomatoes from China...

Look, we're paying higher wages, environmentally focused, especially  here in  California, we have a lot of restrictions in order to be responsible partners globally so yes.  This is when I hope those who request/require sustainable practices in their sourcing needs, will purchase based on those standards.  If they do that is all I can ask and we will be fine.

Let's talk about water availability now. So it's been a major issue a few years ago because of the drought, but last year and this year, it's been better so is it still a worry for next year or the future or do you think it's gonna be fine, what's your view on this?

I think with the weather swings that we have, with longer dry periods and longer wet periods that we're seeing, it's something we're always going to be faced with. We here in California are beginning to deal with (SGMA) the sustainable groundwater management act, so it requires us to reduce the amount of groundwater we're pumping in the future to a sustainable level, so that will have an impact. It is also very important that the government focuses on understanding that every drop of water is precious and how to improve the reliability to the farmers allocations to the best of their ability.  It sometimes appears that might be as big of a priority as it should be.

But I also think it's important; we went through a few years where we probably couldn't find the amount of growers that we were looking for to grow and it wasn't just drought it was also economics, Growers only have so much water so they have to allocate it to crops they can do the best at. I feel like our industry is at a point where that piece of it is behind it; we have mutual understanding and beliefs like we've always had, that we both have to be able to survive in the business but I look at the last drought, for us now, it is an opportunity. We learned  lot of areas that we could grow so I believe that both growers and processors, between now and let's say whenever that next drought may be, to partners with each other, to spend this time finding like I said those partnerships, so when the next drought comes we will be enough better position than I think the last one, in order to source from areas and growers that can provide processing tomatoes during the worst periods of a drought. The drought hurts a little for us just because the cost of water really shoots up a lot and it's a cost issue;  but I think there is a lot of things that I/ we learned through the last one and I think we'll put ourselves in a better position. It doesn't mean we're not going to have droughts, but we have to make sure that both sides are economically healthy to go through the next few years, so when that next drought comes, we're kind of in a better starting point. We have growers that, hey I know I can do this many acres of tomatoes and as long as the economics make sense, there's been a good relationship built between all parties, I believe we'll really kind of go into the next one being able to provide reliable supply, like we have in the past, and probably be a little better at it. You learn a lot when you go through, and they're not difficulties, but it's like it's a challenge right, you go through something and you spend the next gap before it happens again of how do I improve, how do I get better. How do I position myself not to be in that exact spot again and how do I improve and so I believe that we'll be in a better position next drought both economic health, and being able to source more tomatoes. 

So you talked a lot about the partnership between the growers and the processors but about the water availability, is there anything that's been done by the government to make sure there's gonna be enough water?

It's coming but there's going to be a new reservoir potential built, up in the northern part of the state, so it'll be an off-stream reservoir so it's not blocking and tributary to a riiver it'll be pumped into it, but on years when we have a lot of water, they'll be able to store more water there so there's that. It takes a long time to build so you have to go through all the environmental hoops and it's constantly in motion, when it'll be completed, I'm not sure. But I know that's something that they're doing, I think constant working with government on water policy, on making sure that the water that we are spending for environmental concerns is actually beneficial and not just kind of anecdotal or just makes us feel better, like for instance just using more, because more has to be better to solve a problem on an environmental sense, that's not really science, so I think it's more kind of trying to understand how everything works together a little bit better in that aspect but it's tough, I mean you have a lot of interest competing for the same amount of water.

What are the other challenges/opportunities that the California growers are facing?

I think overall we're seeing just more disease pressure, soil health, those kind of things that are normal, but our yields are kind of flat overall, quite a few years in a row and what's that next thing that's gonna, like drip irrigation, that's going to see us have a increase in yields and productivity. So I think that's a continual challenge, you're seeing some growers convert to automated transplanting, in order to try to lower their costs or worker availability, just depending on where you are and what time is beneficial. On the opportunity/ challenging side, our costs keep increasing, we saw a huge increase in costs during covid and inflation at high levels... When the price of an item that we buy goes way up but it comes back down, but it never goes down to what it was, so the cost pressures, especially here in California, we have some of the highest minimum wage in the state which is good, it's just we have to convince the consumer that elects or wants these things, that if you want these kind of environmental and workforce wages, all these kind of provisions, you can't have throwback Thursday pricing. It has to go hand in hand with pricing, because in most cases, we want or do all these things already, for example we want a good soil health, I mean that's the growers asset, it's that piece of ground and what it can produce that determines its value; we want a happy workforce that we wish we could pay even more, but somebody's got to be willing to pay for it in the store. They want the price of 20 years ago but want us to grow it a certain way, it's really difficult, so sometimes I don't know if we connect that quite well enough with our customers. But we'll see,  cost increases, I think are always a concern, trade and just kind of what's going to happen and that dynamic, I'm just watching out for those things. 

So let's talk about the future now. What's the outlook for 2025 in terms of production volume, and you just mentioned costs as well, that they keep growing, are you expecting even more costs for next year? 

Look, next year I believe and I don't think we have a number yet, we won't have our first estimate till January, official estimate, but I believe we're going to be doing less acres this year, that's a strong belief and it's necessary in order to keep things in line and healthy, because, like I stated earlier, if you can't sell it, we probably shouldn't be packing it, in today's climate you don't want to be sitting on inventory for very long. So reducing the pack, that's a good thing, you have to have a customer wanting it at the current time. So we're going see that, I still think we're going to have a minimum wage increase, some inputs, if it's a little drier I mean we're having some rain now but water availability shouldn't be an issue on supplying the tomato crop, but it could impact cost of water, just depending on what allocation we get, we're seeing that. Some inputs across the board, there's some that are probably going to go up and some that might go down, but we don't know exactly yet. It will become clearer after January, we've seen like I said we've seen some easing but nothing is going down to what it was four years ago. The one thing that's impacting growers and everybody is the high interest rates, so you're paying more  to borrow to farm than you did three or four years ago and now we've eased them a little bit, but it's very small and it moves very slowly; it always seems to go up faster than it goes down and so growers are spending more money, just on interest, than they were even not a short while ago. So that's having an impact, so those are some things that we're just kind of watching out ultimately, on everything that impacts our costs going forward. 

Let's talk about organic production; it was really low this year with I think 3.5% of the total volume, so where do you think it comes from, is it because there's no demand for it from people buying, is it because the growers do not want to farm it?

It's just based on market requirement. Growers, at least here in California, entry isn't difficult and I have this discussion with our regulatory legislative bodies also, where they want to just talk about organic,  they feel we need to get more growers into it, like they need to talk them into it. And really, from a tomato perspective, we don't have to talk people into it, there has to be someone wanting to eat it. I truly believe we could grow a million tons of organic in California if the consumer wanted it, if the consumer demanded it,  you have to have the market there in order to produce it. So really the reduction this year was just trying to rebalance the inventory and I think it goes back to the covid, the post covid surge too, because even organic sales got a huge spike during covid and as it starting to settle and we're seeing a lot of inflation and tighter economy, I think some people that might have been buying organic, with the price difference before, kind of go back to non organic because it's too expensive. They only have so much money, if they had extra money in their account, they could choose the organic but as the inflation hit and some things cost more, you have to make choices and I think in some cases the organic choice was, hey I'll just grab this other sauce or this other can, I can't afford it, it's a choice, I need to survive until I have more money in my account, and so yeah for us it's not on the growers end, it's more on the consumer marketing end.

So do you think it's going to stay at that level for the next few years maybe?

It's going to be close, I could see maybe go up a slight bit but not much, it's going to be real close though. I think we had some inventory of it and we're probably still working through that inventory of organic and just depending on how the next four months go, it could change a little bit.  Currently forecasts are being made and they are looking at their monthly sales right now and if they're up two percent, then they have to say okay if we're up 2%, what do we need for the next 12 months and if it's down two percent, well what I need for the next 12 months could change. And so you're making projections, and if you're projecting up or down, that's why looking at the numbers for them are massively important, because you're trying to say, what do I really need based on an estimated sales projection.  Each year some assumptions must be made and also you have to account for what impacts the weather may have on the organic as there is more risk. I do believe that the market is reflecting a higher consumption number than the 383,000 short tons we produced in 2024 though. My belief is  we had some inventory from prior years that we were working through.

Well you started talking about consumption... It seems that it's flat in the US, the domestic consumption, so are you or is anybody doing anything to try to develop domestic demand? 

It's a great question, because we have this discussion a lot and from an organizational standpoint on ways or how we can move the needle when we are dealing with a mature commodity,  Processed tomatoes are the second most consumed processed tomato product in the US behind potatoes. So the US consumer is already eating a lot of them on a daily basis in many forms, I believe the average US citizen consumes around 56 pounds a year of processed tomato products. So, we need to come up with new ideas, I think, new innovation, maybe it's different packaging or maybe ways to consume it that's more convenient or in different forms but really everybody knows our products and likes them.  The marketplace is very competitive with many options for a consumer to choose from but I still believe we are one of the best tasting products and at the same time affordable that a consumer can choose from. 

So talking of innovation, Sophie sent us today something that she saw, I don't know if you have seen it as well. Tomato Wine? Someone said it to me, yes. It's a shame it's already completely out of stock because I would have loved to taste it! But it supposedly tastes like pizza! Did you read it? I think the article says the wine tastes like pizza! I just saw, I don't know where it was but then I went to their Instagram and to the website and it's indeed this winery in combination with Pizza Hut and it tastes like pizza but it's really something I'm like, we need to try it, I want to taste it...

The brands usually have been the ones our industries relied on to develop kind of new products. And there are some new products with new seasoning and flavors that are growing in certain segments. I think what we're seeing now, I don't think it's unique to just tomatoes, but we're seeing it in a lot of the other crops too. People are either eating out of their pantry more or eating less, because it's not just tomatoes, there's other commodities... I'm sure you talk to people around the world. Other commodities that they dealing with, they're seeing the same thing, it's not unique to tomatoes that people are eating out less, people are eating different. That's why I think, people are working from home more, and there's still an adjustment that we haven't got to, that new normal whatever that is of how and where and what people are going to be consuming. I know and we talk a lot with the growers about this every time, but when we're talking about certain things, back to your challenges, when you have challenges or issues, people love to eat our products and that's what I tell our growers, people love to eat it, I mean if they don't like it in one form, they love it another, so all the issues that we have as an industry we're gonna figure out because people like to eat it. I mean if people like to consume what you do and they really like it, they love to eat it, they enjoy it, we'll be able to figure everything else out because there's a lot of industries that have issues that people don't like to eat their product that much. We're not that, people love to eat it, so it gives us the ability to say, okay, how do we get that, how do we improve, but since they love to eat it, we will be able to figure it out we will it's it's kind of like an no-brainer, we're going to get there.

Last question: the US exports were up in 2024, so do you expect it to continue growing next year, the year after? 

I don't believe so, no when I saw the export numbers, they are pretty close, so then we saw a jump in March April May, an increase leaning up to last year's pack. My expectation would be that those would decline a little bit from last year and I think, like I said, we packed less, we're packing less probably this year. So in anticipation of some of that, I think it would be expected. We'd love it to be different but, like I said, in some areas where we might be competing with cheaper products, it's just not going to be competitive. So I think that our historical locations will still be a great export partner and valued and we value them and that'll continue but I think there'll be some areas that just decline over the year.

Thank you Mike!