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Tomato Bites by Morning Star, March 16, 2023 Release

20/03/2023 - Press release , François-Xavier Branthôme - 2023 Season
Aaron Giampietro is back with another TOMATO BITES by Morning Star update. California is currently experiencing the effects of yet another atmospheric river, which has led to delays in transplanting and increased natural gas usage in the greenhouses. However, despite these challenges, we remain optimistic and have implemented plans to expedite transplanting as soon as the weather permits, which will ensure steady volumes of tomatoes well into October.

 The greenhouse sowing for tomato plants is in full swing with approximately 90% of our seeds sown by mid-March. The greenhouses have adapted to colder than average winter temperatures by using natural gas heaters to keep the young seedlings warm, even as the cost of natural gas sky rocketed in California. A number of natural gas pipelines to California were shut down in November and December due to unplanned maintenance amidst soaring demand for heating; this led to a significant increase in burner tip gas per therm, which soared as high as three dollars and 47 cents into December. Nationally, natural gas storage levels are robust and nearing the five-year maximum bounce. Natural gas futures currently suggest much better prices for the upcoming summer months, nearer to the mid-80 cents per therm burner tip cost. 

As for the weather, the latest atmospheric river to hit California has caused further delays to getting into fields to transplant. Processors who rely on completing organic harvest before conventional were hard pressed to transplant even though field conditions were not ideal. Overall, we expect the entire processing schedule for the state to shift back 10 to 14 days from typical startups in the past. Processors will try to close these gaps by accelerating transplanting when fields are available and attempt to also compress the harvest schedule to catch up, but we largely expect to see these delays push volumes later, bringing steady and robust processing volumes clear to mid-October.

Currently in mid-March, the combined water storage in both reservoirs and snow packs is at an impressive 210% of peak amounts; at 247% of peak amounts the southern Sierra Nevada log the highest ever recorded snowpack on March 12th, surpassing the 1982-83 record. Water managers across the State are releasing water from reservoirs as flood control and preparation for potentially strong spring snowmelt. Although the conveyance system is not yet exhausted, we are closely monitoring large areas of the low-lying southern valley known as the Tulare Lake Basin. Historically this area has flooded under similar conditions when heavy snow packs are concentrated in the Central and Southern Sierra Nevada mountains. Heavy groundwater pumping in this region has also considerably dropped groundwater levels causing subsidence and creating a terrain that is somewhat unknown as to how it will handle and drain excess water. In a favorable turn of events, Governor Gavin Newsom issued an executive order this February easing some endangered species requirements in the Delta. This order kept about 500,000 acre feet of water in storage, enough water to supply 80% of the entire California processing tomato crop annual demand. The order was later ascended on March 9th due to changing hydrological conditions from recent storms. But on March 10th, the Governor issued a new order that suspended permitting regulations for diverting storm water for groundwater recharge and percolation projects, which is expected to bank another 600,000 acre feet of water. The picture is becoming clear that reservoir should be full by the summer and storage gains will offer a strong base to build off into 2024.

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