Written and Published by BMT Foods, May 26, 2022
Tomatoes can be used in nearly every type of cooking. They are beloved for the unique taste and acidity they add to many dishes. Tomatoes are an excellent source of vitamins and antioxidants, and they have been linked with a reduced risk of several diseases, including cancer and heart disease. Tomatoes are also a good source of fiber and potassium.
California is the largest American grower of tomatoes with a year-round crop. Traditionally, the tomato market has been stable with a steady crop, but recent developments at home and abroad have changed that.
What is the current state of the tomato crop?
Currently, the cost of harvesting tomatoes has grown dramatically compared to previous seasons. The California Tomato Growers Association (CTGA) closed the pricing for the fresh crop price for CY22 at $105.00 a short ton – an increase from $84.50 a short ton in CY21. This 25% increase was driven by several issues at the processor level.
First, CY21 – last year – had the least number of acres planted since 1989, mostly due to the increase costs of growing tomatoes. Growing tomatoes is water-intensive and government policies have required all crops to use ground water instead of water from individual water districts. Labor, fuel, and fertilizer costs have all soared in recent years, too.
Overall economics have changed, too, increasing prices. Some tomato growers have instead started growing garlic, onions, cotton, silage corn, and other permanent crops, as the economics of these crops makes more sense to them. For example, Pima cotton prices are currently at all-time highs in California. To incentivize growers to continue to grow tomatoes, the CTGA-set price has needed to increase.
Additionally, processor demand has increased prices. In recent years, a weaker dollar and crop shortages overseas have made U.S. tomato products more competitive for exporting. Along with larger domestic consumption and lower domestic inventory, demand has soared.
How have world events have affected the tomato crop?
In Europe, Ukraine-Russia war has damaged tomato powder production and may affect tomato paste season. Energy costs soared from 60 euros per MWh to nearly 450 euros, while gas costs are likely to increase from 26 euros to around 300 euros. If trends hold, we may see prices of up to 5.50 euros per kilogram of tomato powder shipped, dependent on further price changes.
If you want to learn more about the state of the 2022 tomato crop, BMT Foods is ready to help.
BMT Foods offers top-quality tomato products for your custom product needs. We offer Tomato Powder (Conventional and Organic) – perfect for Breads, Spice Blenders, Dried Food Preparations, Pasta Products, Soups, and Dressings – as well as Tomato Paste (Conventional and Organic), available at different brix levels. As the BMT Foods team further discovers insights about this year’s California tomato crop and the tomato powder market, we will inform our customers. Reach out to us today to learn more.