Strong winds, heavy rains and cold temperatures in March put California’s processed tomato crop behind schedule. Transplanting was delayed about three weeks as growers waited for a break in the storms long enough to dry out the ground.
After receiving his MBA from St. Mary’s College in 2007, Nick Kastle joined the Morning Star team. Hired to do marketing, Nick has found that it does not mean blanketing the market place with impersonal, high‐impact graphics but rather on strengthening the individual relationships Morning Star has with its customers.
California Growers have posted three consecutive years of record-breaking field yields. In the last decade growers have improved the quality, profitability and reliability of their tomato crops through the use of transplants and investment in subsurface drip irrigation systems.
When buyers signed paste contracts in the spring, they experienced sharp relief from the rising prices of the last few years. The contract price reflected the lower price of tomatoes and adjustments for natural gas, as well as expectations of a surplus market. Contract prices fell by more than 10 cents per pound this year.
Preliminary results from the World Processing Tomato Council put the global crop at 36.9 million metric tons, down 13% from last year’s record and 7% short of preseason expectations.
California’s tomato growers and processors might be too good for their own good. Once again the world’s largest production area packed an above average crop, creating an excess supply.
After several years of global shortage, last year’s bumper crop shifted the market into a surplus environment. Processors around the world planned to pack less in 2010, but the numbers look nowhere near low enough to balance supply.
At Morning Star, we strive to lead our industry. To us, being the industry leader is not about the size of the company or its age. Leadership means that you innovate, challenge what is considered standard, and drive your industry forward. You question everything, looking for ways to improve and to gain efficiencies.
Weather around the world has not cooperated with the tomato growers. Forecasts are down from the spring, according to the World Processing Tomato Council’s July 30 report.
May and June were not kind to California’s tomato crop. Winter‐like temperatures and late rainfall delayed transplanting and slowed the development of seedlings.
Since tomatoes make up most of tomato paste’s processing cost, bulk tomato paste prices follow the field price closely. This year the raw tomato price will tumble 20‐25% and reduce paste prices proportionately. Opening offers for new pack 31% NTSS tomato paste range from 36‐38¢ per pound — below last year’s open‐ ing price of 48¢.
When cooking in your own kitchen, you buy the best ingredients to create a flavorful meal. The same holds true for the foods made in your company’s kitchen. Therefore, price shouldn’t be the only deciding factor as you look to make purchasing decisions for the coming pack season.
California’s 2010 processed tomato crop is forecasted at 12.6 million tons, a 5.4% decrease from last year’s record 13.3 million tons, according to the National Agricultural Statistics Service.
Despite forecasts of record processing tomato volumes, pricing for California paste is not dropping. Prices are holding at about 46-48 cents per pound for 31% NTSS paste in bins. Processors are unwilling to lower prices for a collection of reasons ranging from steady demand, high input prices, and the uncertainty of a long season.
The global crop is expected to set a record at just shy of 40 million metric tons (MT), according to the World Processing Tomato Council. The previous record of 36.6 million MT was set in 2004. Last year’s production at 36.58 million MT was no slouch, but 2009 could prove to be 13% larger.
