2008 looks rosy for tomatoes

Growers of processing tomatoes, people vital to the creation of pizza, ketchup and salsa, expect a fairly good 2008.

Most canneries in the Central Valley have agreed to pay $70 per ton for this year's crop. That's up from $63 last year and $50 to $58 earlier this decade, when many growers did not turn a profit.

"Compared to the last couple of years, the tomato industry looks a lot healthier," said Aaron Barcellos, a grower near Los Banos.

Several thousand people work from July to October at the canneries, some of them in and near Stanislaus County. The product is distinct from fresh market tomatoes, a smaller but higher-priced crop.

The state grew 12.08 million tons of processing tomatoes last year, second only to the 12.24 million in 1999, according to the U.S. Department of Agriculture. The 2008 crop is projected at 11.8 million tons, which would be the third-largest on record.

The price increase and rising demand reflect a dramatic turnaround for the industry, which had struggled in the past couple of decades. Per ton prices were sluggish, and overproduction contributed to the 2000 bankruptcy of the Tri Valley Growers canning cooperative.

The higher price this year will have little effect on consumers, though, because raw tomatoes are a small part of the retail price, said Chuck Cox, a grower near Westley. The $20 a ton increase in recent years amounts to just a penny per pound.

Still, that's enough to allow a typical grower to cover farming costs and make about an 8 percent profit this year, said Ross Siragusa, president and chief executive officer of the California Tomato Growers Association in Sacramento.

Those costs -- including seeds, water, fertilizer, pesticides, fuel and labor -- have been rising.

"I think the processors realized the growers needed a higher price," Siragusa said. "I don't think they were terribly thrilled about it."

The canneries face increased costs of their own, especially for the energy needed to haul, cook and can the tomatoes, said Ed Yates, president and chief executive officer of the California League of Food Processors in Sacramento.

Projected yield depends on water

Siragusa said the 11.8 million ton projection could be hard to meet. He cited the possibility of water cutbacks on the West Side to protect fish in the Sacramento-San Joaquin Delta, and the high prices growers can get for alternative crops such as corn, wheat and alfalfa.

The result could be a drawdown in the processed tomato inventory carried over from 2007, most of it in vats of paste. Demand is fairly strong, especially in export markets, so that stockpile could move fast, industry leaders said.

Planting of the 2008 crop has started near the south end of the state and will move up the valley in late winter and early spring. The wet January was ideal, moistening the ground and leaving a heavy mountain snowpack. Growers hope for a few more storms and for a summer free of severe heat waves.

"Overall, I think the industry is healthy," Siragusa said. "The concern is, can we get enough tons to run the plants profitably, and can we get enough water?"

Canned tomatoes already are widely used in American and other cuisines, but industry people hope to create even more demand.

Part of it is through messages about health. For example, some studies suggest that the lycopene in tomatoes could protect people from cancer and that the body absorbs more of it if the tomatoes are processed rather than fresh.

Industry people also tout the consistent quality of processed tomatoes, an advantage during the times of the year when fresh tomatoes aren't so good.

Cox said the slowing economy might reduce processed tomato consumption at restaurants.

"But on the other hand, people are cooking more in the home," he said. "Our products are a good fit there, too."

Bee staff writer John Holland can be reached at jholland@modbee.com or 578-2385.

This story was originally published February 16, 2008 at 4:49 AM with the headline "2008 looks rosy for tomatoes."