Tomato demand spurs record California crop amid drought
An estimated 14 million tons of processing tomatoes were harvested in California this year, the most ever and up 16 percent from last year, according to the California Tomato Growers Association, a trade group for the $1 billion-a-year industry. Canneries such as Campbell Soup Co. (CPB) paid $83 a ton, also the most ever.
With 82 percent of California suffering from extreme drought after three years with record low rain and snow, the water distribution system is rationing supplies to the nation’s most productive agricultural region. Growers have been forced to drill wells, sapping already depleted groundwater. The dry spell is likely to boost food prices nationwide as farmers leave some land unplanted because they can’t irrigate, according to the U.S. Agriculture Department.
Running Out
Processing tomatoes are different from the kind consumers buy in grocery stores for home consumption. They have thicker skins, to survive being stacked in trucks loaded with as much as 25,000 pounds. Processed tomatoes are picked ripe and red and typically canned within six hours. Fresh market tomatoes are picked green and then gassed with ethylene produced naturally by fruits to promote ripening.
California produces 95 percent of the tomatoes in the U.S, according to the tomato commission. Worldwide, growers last year produced 33 million tons, down 22 percent from a record set in 2009.
Campbell Soup
Food processors such as Campbell sought additional tomatoes from California to carry the company into the beginning of next year as worldwide production continued to remain at or below demand.
“Despite the drought conditions in the state, California experienced a record crop this year in tomatoes, which relied more heavily on groundwater resources than in prior years,” said Tom Hushen, a spokesman for Campbell. “We processed more ingredient this season to support Campbell’s needs this year as well as some of next year’s requirements.”
Agriculture consumes about 80 percent of all delivered water in the most populous U.S. state. California’s 80,500 farms and ranches supply everything from milk, beef and flowers to half of the fruits, vegetables and nuts consumed in the U.S.
Because of the drought and water rationing, well drilling has doubled and even tripled in some counties as farmers scour for more water while paying escalated prices from other sources.
Source: bloomberg.com