As Florida's fresh tomato crop recovers from the damage inflicted by Hurricane Wilma this past year, shipping-point prices have moved lower, according to the latest vegetables and melon outlook from USDA.
The Florida vegetable industry suffered substantial hurricane damage to crops and infrastructure from Hurricane Wilma on Oct. 24, 2005. Following cleanup from Wilma, growers in southern Florida replanted crops such as green beans and squash, with the harvest of those crops beginning in mid-December. However, tomato harvest was further delayed by cool December temperatures, which slowed growth. As a result, market volume from Florida was half that of a year earlier, with market-normal shipments resuming by mid-month in January.
Shipping-point prices — which is one market stage above the grower level — averaged nearly $33 per 25-pound carton through mid-January for field-grown mature green tomatoes. However, prices dropped by to $16 per carton by the middle of the month and as low as $12 per carton by the end of January and into mid-February.
This is still more than the $8 to $10 average for this time of year and a reflection of lower acreage this winter. The Bureau of Labor Statistics reported that the January 2006 national average retail price for field-grown tomatoes was $2.16 per pound — up 30 percent from a year earlier but below the record-high $2.47 set in December 2004.
A year earlier, markets were besieged by a glut of fresh tomatoes as replanted volume — following the Florida hurricanes — came to market simultaneously, pushing prices to very low (and unprofitable) levels. This year, Florida's winter tomato acreage was reduced by 12 percent to 11,000 acres — the lowest in many years.
Growers apparently were wary of a repeat of last year's market glut and resulting low market prices. Imports from west Mexico this year also got off to a slow start because crop maturity was delayed by cool weather, with “normal” volume beginning to come in by mid-January.
With strong Florida fresh tomato shipments and imports from Mexico now running above year-earlier levels — especially for roma tomatoes — prices have moderated as total shipment volume approached its seasonal average. Lower retail prices were expected to follow by late February as market pipelines (repacker, warehouse and store inventories) were replenished.
Cold temperatures in mid-February, which resulted in freeze damage to Florida's spring-crop sweet corn and snap beans in the Everglades, also slowed growth of winter-crop tomatoes, peppers, and eggplant.
The Florida Tomato Committee is conducting an extensive advertising campaign this winter to raise and maintain consumer awareness of Florida tomatoes. The industry fears a repeat of the unusually low grower prices experienced last winter after a sluggish consumer response to the return of low-priced tomatoes left millions of pounds of tomatoes unharvested.
Processors are considering packing 23 percent more tomatoes in 2006 due to smaller international and domestic stocks and stronger wholesale prices for tomato products, according to the USDA report. In 2005, world production was estimated to be 14 percent below the previous year, with reduced output in all major regions. Production in Italy, second only to the United States in world processing tomato production, declined by 17 percent to 5.8 million short tons last year.
Contract price offerings by processors for the 2006 crop also are expected to be higher, reflecting increased grower costs for inputs such as fertilizer, fuel, and labor.
The value of production for fresh-market vegetables totaled $9.8 billion in 2005, up 1 percent from a year earlier. Increases for onions (up 19 percent), leaf lettuce (up 17 percent), and tomatoes (up 14 percent) were driven largely by higher prices. Crop revenues dropped 12 percent to $4.6 billion in California, which accounted for 47 percent of the national value of fresh-market vegetables, compared with 55 percent a year earlier. Production of fresh vegetables generated $1.5 billion in crop values in Florida — up 4 percent from 2004 as higher prices outweighed lower output.
The value of melon production rose 7 percent in 2005 to $780 million on the strength of higher watermelon prices. Despite a 3 percent larger crop, watermelon grower prices jumped 27 percent to a record-high 10.8 cents per pound, as demand was strong in 2005. As a result, the value of production rose 31 percent to $410 million — exceeding the previous nominal-dollar record of $351 million set in 1995.
Meanwhile, the value of the cantaloupe (down 7 percent) and honeydew melon (down 25 percent) crops each declined.
Largely because of a smaller tomato crop, the value of production for processing vegetables declined 10 percent to $1.3 billion. The value of the processing-tomato crop fell 14 percent to $622 million as a 17 percent smaller crop outweighed a 4-percent gain in the average f.o.b. plant door price.
This winter — January through March — fresh-market vegetable and melon area for harvest is expected to rise 2 percent from that of a year earlier. Improving yields in Florida, Mexico and California also have led to stronger domestic shipments of most vegetables.
Reduced acreage in Florida (down 2 percent) and Arizona (down 1 percent) was outweighed by increases in Texas (up 8 percent) and California (up 6 percent). California accounts for about 47 percent of winter vegetable acreage, followed by Arizona (27 percent), Florida (20 percent), and Texas (6 percent).
Area for harvest increased the most for carrots and cauliflower. Tomato and sweet corn acreage registered the steepest declines, as Florida growers appear to have been conservative in replanting area damaged by Hurricane Wilma. Winter-season area for harvest accounts for about 10 percent of the annual fresh vegetable and melon harvested area (1.9 million acres in 2005).
This spring, onion growers intend to plant 2 percent more acres than a year earlier. Harvested area could be as much as 8 percent greater than a year earlier if onion growers in Georgia manage to dodge the pest and weather problems that have resulted in increased acreage losses the past few years.
In Georgia, growers finished setting the Vidalia onion crop in January, and as of mid-February, the crop was reported to be in favorable condition. With the relatively mild winter, crop growth was reported to be ahead of schedule in Georgia. If weather continues on this path, harvest will also begin early — perhaps during the first part of April.
As with other fresh-market vegetable growers, the spring-season onion industry (particularly in Georgia) is concerned about labor availability. Unlike the storage onion crop, virtually all of these tender non-storage onions rely on hand harvest to minimize damage and maintain maximum quality.