your-news image

Tomato market should be stronger as summer wanes

When the California mature green tomato deal got started in mid- to late June, it was plagued by an oversupply situation, according to tomato veteran Joe Bernardi, but he said it did strengthen in July and he expects a fairly good market from mid-August on.

In late July, he said, “he good news is we are getting good distribution to all parts of the country.”

Mipueblo-014A large display of Roma tomatoes at a Mi Pueblo store in California.That’s good because it most likely means there is not a bumper crop of local tomatoes across the country. Of course, it is always difficult to judge the size of the local deals because many of them are literally backyard plants that cut into demand but are not trackable.

Bernardi is president of Bernardi & Associates, which is based in Nogales, AZ, though he operates out of Tracy, CA, in the summer months. He said several of the local commercial deals in the South and Southeast never really got going this year, which aided western shippers of both mature greens and vine-ripe tomatoes. “The backyard deals always have some kind of impact, but it seems like the small regional deals won’t affect us as they have in the past.”

He said that the mature green market and the vine ripes are two different markets that operate independently, as long as they are both in a relatively balanced supply-and-demand situation. They operate separately largely because there are different buyers. Mature greens are typically sold to foodservice operators for their use with burgers or other dishes, or repackers, who package them in multiples, complete the ripening process and sell them to a variety of customers. Vine-ripe tomatoes are often sold directly to the retail trade. But when a specific SKU is in short supply, it does affect the others as consumers will switch their buying habits when specific tomatoes show sharp increases at retail.

Bernardi said the marketing situation at retail has changed tremendously over the years because of the growing number of tomato products. “I was in a store the other day that had one display of shadehouse rounds and another of field-grown vine ripes,” which he indicated a decade ago might have been the extent of the tomato display. “There were also 10 other tomato SKUs on the shelf,” he added.

That group included cherry tomatoes, yellow tomatoes, grape tomatoes, Romas and an assortment of packaged tomatoes. Consumers have options and they exercise them freely. “Shoppers will cross over depending upon price,” he said.

Another broker weighing in on this year’s tomato situation was Chuck Thomas of Thomas Produce Sales, also headquartered in Nogales. Surveying the situation from coast to coast on Aug. 2, Thomas said the market was strong and he saw no letup in sight. “This has been a very unusual deal due to all the rain on the East Coast. Every time you look up its raining somewhere. Usually the local deals and the home-grown backyard gardens significantly cut into demand in July and August, but that didn’t happen this year. Even the little guys, with a few plants in their backyard, didn’t have a good crop.”

He said that even though a new crop of tomatoes from Oceanside are about to enter the supply side, that won’t make up for the decline, and demand will continue to outflank supply. “I don’t know when that will change. I think we will have good demand throughout the fall and into the holiday season. Maybe after Christmas it will ease up.”

Even then when mainland Mexico becomes a major supplier, Thomas said tomato supplies could still be tight. “With the suspension agreement in place, I don’t think we will see an increase in acreage in mainland Mexico. I think some growers will switch to other vegetables so we could see fewer tomatoes,” Thomas said.

He has heard that some greenhouses — located in the United States and seeing the same scenario — might increase their acreage to fill a potential supply gap. Thomas said over the next few years that could help change the supply situation, but for the foreseeable future — let’s say through the end of the year — he expects the strong market to persist.