| 1999
processing tomato crop shatters record |
VEGETABLES AND
SPECIALTIES
November 1999, ERS-VGS-279
Approved by the World Agricultural Outlook Board
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VEGETABLES AND SPECIALTIES is published three times a year (includes
yearbook) by the Economic Research Service, U.S. Department of Agriculture,
Washington, DC 20036-5831. This release contains only the text of the report -- tables and graphics are not included. See supplemental data
files in Lotus 123 (.WK1) format.
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1999 processing tomato crop
shatters record
Spurred by low stocks and strong wholesale prices, tomato processors have harvested a
record-large crop this year. According to delivery information from the California Tomato
Advisory Board, 12.24 million tons of tomatoes were delivered to processors in the State this season. Adding
an expected 0.5 million tons from other States would result in a U.S. processing
tomato crop exceeding the 1994 record by 10 percent. With excellent weather (warm and dry) allowing an
unusually large (record-large) volume to be harvested late in the season (after
October 1), the California crop substantially exceeded both industry and U.S. Department of Agriculture estimates.
Quality was said to be excellent this year, an especially important attribute for packers of
whole-tomato products (diced, peeled, etc).
Despite another late spring and cooler than normal temperatures during the early part of the California season, early-season
tomato harvest volume was able to run 2 to 3 weeks ahead of last year's El-Nino-delayed season. Tomato yields likely returned to
trend levels this season and were up substantially from a year earlier when poor weather caused the largest year-to-year decline
in yields since 1973. From mid-summer to the end of the season, warm (and at times hot) and dry
weather held in California, greatly aiding harvest activities and crop quality. Processors
ran close to industry capacity (about 1 million short tons/week) during most of August and September.
With stocks low and imports filling supply gaps, wholesale prices for bulk tomato paste remained strong (over 45 cents per pound)
during 1999 and did not begin weakening until September when the success of this year's crop was all but assured. By the
beginning of November when nearly all processors had shut down for the season, bulk paste prices had dropped to around $0.36 per
pound. This year's record-large crop will easily cover anticipated demand and result in some
accumulation of inventories. Further significant price movement will not likely
take place until early in 2000 when preliminary intentions are released for the 2000 crop.
The U.S. processing tomato industry will continue to upgrade facilities and increase efficiency in 2000 through the
construction of two new processing plants plus the expansion of others in
California. Despite the modest increase in capacity, steady domestic demand, plus competition in
the export market will likely keep a lid on tomato acreage in 2000. The first
acreage intentions for 2000 will be published in January.
Processing tomato production in countries that are members of the Association of Mediterranean
Tomato Processors (AMITOM) was also reportedly record-large this season. AMITOM is an
association of tomato processors from 10 countries in the Mediterranean Basin,
led by several from the European Union (EU). AMITOM and the United States account for the lion's share of the world's
processed tomato products with both realizing similar production levels in 1999. The EU accounts
for around three-fourths of the output of AMITOM, with Italy accounting for about 40 percent.
Thus, larger world production will boost depleted stocks and lead to both downward price pressure
worldwide and additional competition for U.S. exports.
Short crops, depleted inventories, and higher prices characterized the 1998/99 U.S. processing
tomato market. As a result, the value of imports during the first 9 months of the
calendar year jumped 55 percent to $107 million. The majority of this increase came from sharply higher paste
imports, which rose from $6 million to $57 million. As the leading tomato paste
manufacturer in the world, the United States only imports paste during periods of shortages. Chile ($26 million) and
Mexico ($15 million) accounted for the majority of the paste imported during
1999, with smaller amounts from Peru ($4 million), Israel ($5 million), and China ($3 million). In the year ahead, paste
imports will likely be minuscule due to this year's record-large tomato crop.
From January through September 1999, the value of processed tomato product exports totaled $167 million, down 5 percent from
the same period a year earlier. Virtually all of this reduction came in
paste exports, which dropped 22 percent. The decline in paste was a direct result of the smaller
crop last year and the higher prices accompanying reduced stocks earlier this year.
Although paste exports declined, exports continued to increase for sauces (up 2 percent), ketchup (up 4 percent),
whole peeled tomato products (up 14 percent), and juice (up slightly). Tomato
product exports to Canada, the largest market, were flat at $86 million, while Japan was down 16 percent to $17
million. Exports to Mexico were up 24 percent to $13 million.
Printed copies of the Vegetables and Specialties Situation and Outlook report will be
available in about 2 weeks. For more information contact Gary Lucier, 202-694-5253 or
Charles Plummer, 202-694-5256. This report includes two special articles entitled,
"Modeling the U.S. Processing Tomato Industry" and "The F.O.B.-Retail
Price Relationship for Selected Fresh Vegetables."The text of the report will also be
available electronically via the ERS website at www.econ.ag.gov.
ERS-USDA news release |
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