Overproduction forces California tomato growers to mull cutbacks
California tomato growers face a market shakedown that could result in a decline in their numbers, or in a drop in the number of acres planted -- or both.
Cause of the impending shakedown is a leveling off of national demand for processed tomato products.
Since the 1960s the market for canned tomato products has steadily climbed -- partly due to Americans' enlarging appetite for fast foods using tomato products , such as pizzas and hamburgers -- and California growers have exploited their state's natural advantages to dominate the flourishing industry.
Golden State growers do not depend on the vagaries of the weather as their Midwest and Eastern counterparts do. Instead they rely on irrigation to control the timing and amount of water their fields receive.
Growers have also invested heavily in mechanized harvesting equipment and dramatically increased their yields through breeding research.
All of this has allowed canners to double their output in the last 15 years and expand their stranglehold on the national market from 70 percent in the mid- 1960s to 90 percent now.
In 1979, the last year for which figures are available, California canners packed 6 million of the nation's 7 million tons of tomato products.
But the farmers grew 10 million tons.
Consequently the prices canners offered growers the next year plummeted and the canners accepted less tomatoes, resulting in about 30 percent fewer acres planted in 1980.
With escalating energy and equipment costs, growers made little money last year, a signal they will be forced to adjust to market conditions in coming years, says Eric Thor, an agricultural economist with the Giannini Foundation at the University of California, Berkeley.
"They need to go down 25 to 30 percent in growers and that is going to be slow."
Other crops - wheat, corn, beans -- earn as much as tomatoes, he says. But those crops require specialized machinery.