New Zealand: why tomato prices are going through the roof

The price of tomatoes is going through the glasshouse roof, thanks to the rising cost of three key elements, says one of the country's biggest tomato growers. Simon Watson, managing director of NZ Hothouse, said the number one reason for more expensive tomatoes was more expensive and very scarce labor.

The cost of fertilizer and of energy have also jumped, with fertilizer up 81% in the past year. The three items accounted for 60% of the price of tomatoes on the shelf, Watson said. The price of tomatoes rose nearly $4 between July and August alone, according to Stats NZ.

The price of many food items is rising quickly, but tomatoes are leading the way. They are up 162% since 2009 when food inflation was the same as it is now, beating cabbages (up 138.1%) and capsicums (up 118%). The price was rising because there was a shortage of tomatoes for a number of reasons.

Labour was "incredibly short" across the whole economy, not just horticulture, because the Government had kept the borders closed for too long, Watson said. "We advertise week after week, and you can't get any replies. It's not even a case of what you're paying. Labour is a third of our sales value. It's a huge part of it, the dominant part of it."

Because growers could not guarantee they could plant, pick or process their crops, they were planting fewer tomatoes, resulting in a crop reduction of about 15%, he said. "Growers have been very careful how they spend their money because costs have gone up far, far quicker than the value of the tomatoes."

Read the complete article at www.stuff.co.nz.


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