No longer in the red?
Tomato growers feeling optimistic about prices going higher this season
By JOHN HOLLAND
BEE STAFF WRITER
Last Updated: January 28, 2006, 06:38:55 AM PST
Growers of processing tomatoes expect a boost this year over the dismal prices of recent times.
Processors have not yet announced the 2006 prices, but indications are that they will be $58 to $59 a ton, said Ross Siragusa, president and chief executive of the California Tomato Growers Association.
From 2000 to 2005, prices hovered around $50 a ton, which growers said did not cover their costs.
"Another $8 a ton will give us a little extra breathing room, which we really need," said Chuck Cox, a grower in the Westley area.
Processing tomatoes, which go into ketchup, pasta sauce and other products, remain a major crop in the Northern San Joaquin Valley despite tough times for most of this decade. They are distinct from fresh-market tomatoes, which draw far higher prices but involve different varieties and handling methods.
Cox and Siragusa commented after the association's annual meeting, held Wednesday at Modesto Centre Plaza. About 300 people heard about the industry's outlook from processors and other experts.
Reuben Peterson, director of global tomato supply for H.J. Heinz Co., said California growers face increasing challenges caused by regulations, water supplies, labor, energy costs and other issues.
Nonetheless, he said, the state's tomatoes are high in quality and remain a good value for Heinz, whose plants include Escalon Premier Brands.
"California is viewed as best in class throughout our company," Peterson said. "It's a benchmark against which we look at all supplies in the world."
He added that growers elsewhere, such as China and Egypt, could catch up to California in tomato yield, quality and value. The state produces more than a third of the world's processing tomatoes.
Rodger Wasson, who used to head the marketing efforts for the state's almonds and strawberries, said a shortage of clean water could keep developing countries from expanding their tomato industries. Meanwhile, the expected weakening of trade barriers could boost U.S. exports, he said.
Several thousand people are employed during peak production at area canneries, including Stanislaus Food Products in Modesto, ConAgra Foods in Oakdale, and Ingomar Packing Co. and Morning Star Packing Co. in Merced County.
Processors said they — as well as growers — are pressed by high costs for labor and energy, including natural gas for cooking the tomatoes and diesel for trucking to ship them. The cost of steel for cans also has shot up.
But speakers noted underlying strengths for tomatoes: They are tasty and healthy.
"It's a fun food," said Morning Star owner Chris Rufer. "It adds flavor and color, a lot of appeal."
Dave Withycombe, senior vice president for western manufacturing at Del Monte Foods, said the industry should increase the use of jars, pouches and other alternatives to cans. Consumers want foods that look wholesome on the shelf and are easy to carry in lunchboxes and backpacks, he said.
"We have to be relevant to today's lifestyle," Withycombe said. "We can't do the same thing we've done year after year after year. We have to develop pull for our products."
Bee staff writer John Holland can be reached at 578-2385 or [email protected]