| Processing
tomato output to rise in the US |
VEGETABLES AND
SPECIALTIES -- April 22, 1999
April 1999, ERS-VGS-277
Approved by the World Agricultural Outlook Board
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This report is published by the Economic Research Service, U.S. Department of Agriculture,
Washington, DC 20036-5831.
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Processing tomato output to rise in the US
Tomato processors intend to contract for 17 percent more acreage in 1999. California,
which now accounts for about 95 percent of the U.S. processing tomato crop, projects
output to rise as much
as 30 percent, with all other States projected to produce 10 percent more than a year ago.
This increase is a reaction to sharply higher wholesale prices for tomato products caused
by last year's weather-shortened crop and continued strong consumer demand. The average
price for bulk tomato paste, the key raw ingredient used in the manufacture of tomato
products like sauces, soups, ketchup, and juice, was up 45 percent during the first
quarter of 1999 (table 22). This was the highest paste price since 1990 and reflects a
California stock situation (for all tomato products) about 20 percent below a year ago.
ERS estimates suggest this was the shortest January 1 inventory position since 1988.
In response to higher market prices and lower inventories, the California Tomato Growers
Association base contract price for processing tomatoes in 1999 is up 9 percent to a
nominal dollar
record high of $58 per short ton. This compares with a base price of $53 per ton last
year--the highest in several years (the lowest in the past 5 years was $47 per ton in
1993). Given good plant efficiency, this means that the raw product component cost for
paste manufacturers will rise from just over 16 cents per pound of paste (31 percent
solids) to nearly 18 cents.
In 1998, the value of processed tomato product exports exceeded the value of imports by
$129 million, down from a margin of $148 million in 1997. Higher prices for tomato
products during the second half of the year made the U.S. market more attractive to
foreign traders but also discouraged potential buyers of U.S. products. Import volume
increased to nearly 5 percent of total domestic tomato use, compared with nearly 4 percent
in 1997. Exports used 7 percent of total tomato supplies, the same as in 1997. Canada
remained the leading market for U.S. processed tomato exports, accounting for 50 percent
of the total value sent to other nations. Japan (12 percent) and Mexico (6 percent) were
the next most important foreign buyers of U.S. tomato products.
Per capita use of processing tomatoes was estimated to be 75.6 pounds in 1998, up 2
percent from the previous year. The increase in domestic use was significant since export
volume declined 7
percent from the 1997 record high. Despite the fact that estimates of total tomato
movement during the calendar year indicate an increase, cursory supermarket volume
summaries suggest sales volume was lower in 1998. This suggests that most of the growth in
tomato product sales is likely occurring in the foodservice/institutional sector. With a
larger crop and an expanding economy supporting foodservice demand for tomato-based foods
such as pizza and pasta dishes, domestic use in 1999 will likely be maintained near last
year's level of 20.4 billion pounds (fresh-weight basis). Although production is expected
to rise substantially this summer, export volume will not likely recover its previous
vigor until late summer when U.S. tomato product prices decline.
Printed copies of the Vegetables and Specialties Situation and Outlook report are
available. For more information contact Gary Lucier, 202-694-5253. This issue contains a
special article entitled "The Role of Exports in the U.S. Fruit and Vegetable
Industry." The text of the full report is also available electronically via the
ERS website at www.econ.ag.gov.ERS-USDA news release |
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