Squeeze on Tomatoes

Supplies of salsa, spaghetti sauce and pizza topping will be tighter--and prices at least a few pennies higher--in coming months, thanks to none other than El Nino.

Because of the cool, wet spring and early summer, tomato processing in California is a month or more behind schedule, and the crop is significantly smaller than usual.

Consumers are already feeling the pinch; prices of finished tomato products have scooted up 7% since the first of the year, and further bumps are anticipated, said John Welty, executive vice president of the California Tomato Growers Assn. in Stockton.

The Golden State accounts for 95% of the nation’s and about 45% of the world’s supply of processing tomatoes and thus “sets the world price,” said Jeff Boese, president of the California League of Food Processors in Sacramento.

Typically, California produces 10.5 million to 11 million tons of processing tomatoes, he said, adding that this year, “we’ll be extremely lucky to reach 9 million tons.” Processors usually pay about $53 a ton for tomatoes, tacking on premiums for quality and variety.

Fortunately for consumers, the industry’s pipeline of goods has been filled to overflowing the last couple of years. That has helped hold down prices for some of the ingredients that have fueled the boom in Italian and Mexican foods. Meanwhile, growers have complained about feeling squeezed, and the industry has endured consolidation, cutbacks and an occasional plant shutdown.

About 40 tomato-processing plants in California churn out paste, sauce, soup, catsup, salsa, pizza topping and sun-dried tomatoes. The leaders include Campbell Soup Co., Del Monte Corp., H.J. Heinz Co., Hunt Foods Co., Ragu (the spaghetti sauce makers, owned by Unilever), Morning Star Packing Co. and Tri Valley Growers. (In July, that large Northern California grower cooperative reported a $53-million loss for its most recent fiscal year, blaming the red ink not on El Nino--surprise!--but on large inventories and misguided price increases on fruit cocktail, olives and other goods.)

Complicating matters, growers have had three spates of sizzling heat, which can burn tomatoes. With half the crop yet to be harvested, picking will be pushed well into October, when unpredictable weather could wreak further havoc.

Given the short crop, Boese feels comfortable making a prediction. Come next year, he said, “we would expect a large crop as [we] rebuild the pipeline.”

Fresh Front

The fresh-tomato industry is also topsy-turvy because of the odd weather.

“El Nino hit us hard on the front end,” said Ed Beckman, president of the California Tomato Commission in Fresno.

Late plantings and slow plant development have led to harvest delays of a month to six weeks. In June, a dearth of tomatoes drove the price in chain stores to as high as $2.29 a pound.

Despite a glut that built up by late July, “the price has been very slow to come down,” Beckman said. Farmers, meanwhile, are getting just 17 cents a pound.

“For the last three weeks, growers haven’t made a dime,” Beckman said. Beckman indicated that big Southern California grocers appear to be taking advantage of shoppers. He recently surveyed prices for California-grown tomatoes in Seattle and Portland, Ore., and found them to be 99 cents a pound, half the retail cost in the Southland.

Tight Labor

With weather-delayed harvests bunching up throughout California, the stage is set for a farm labor shortage just in time for the massive grape harvest. Manuel Cunha Jr., president of the Nisei Farmers League, reports that recruiters--or “coyotes,” as he terms them--are luring migrant workers with $50 to $100 bonuses to go pick apples in Washington state.

“Right now, labor is beginning to get tight,” said Cunha, whose grower-backed Fresno organization serves as a liaison with field workers. “And we haven’t even started the peak grape harvest, when we’ll need 50,600 workers.”

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Martha Groves can be reached by e-mail at martha.groves@latimes.com or by fax at (213) 473-2480.