The growing water shortage in California has left the country's tomato industry in dire straits. Droughts are happening more frequently, and the state is facing a third consecutive year of dryness. The past 20 years have been exceptionally warm and dry, including the 2012-16 drought, the hottest recorded in history, based on data from the National Oceanic Atmospheric Administration. The current drought has led to a decline in the state's natural water-management infrastructure due to historical over-pumping by farmers, whose reliance on groundwater has increased significantly due to the perennial drought.
This crisis has compromised the country's processed tomato crop, as the Gold Coast produces 95% of the processed tomato products in the US. The country's processing volumes could plummet from 10.8 million mt in 2021 to 9.5 million mt this year, a 12% YoY decrease and 1.5 million mt less than projected. This output would also be the lowest in over 15 years and 15% below the 5-year average of 11.2 million tons. The harvested processed tomato acreage could also fall to 224K tons, slightly lower than the 5-year average of 226K tons, while the yield of 46.9 tons per acre could be the lowest in nine years.
These low volumes have led to a surge in the prices of products such as ketchup, salsa, pizza sauce, marinara sauce, tomato juice, and tomato puree. The cost of tomato sauce is 17% higher than the previous year, while tomato pastes have surged 80% since last year. The current price of ketchup is USD 3.08 per unit, 23% more than the previous year, and the price could rise to USD 3.57 per unit by 2027.
Tomato farmers in Central Valley, the country's "salad bowl," have also had to endure higher fuel and fertilizer costs this year, making tomato farming significantly more expensive than before. Growing an acre of tomatoes in the state is now around USD 4,000, a 33% YoY increase and 43% more expensive than five years ago: the cost to canners and processors has risen by 50% over the past two years. Many tomato farmers are also shifting away from the labor-intensive crop as increasing production costs continue to shrink profit margins. Other crops, such as onions and garlic, offer more financial benefits and are less labor-intensive. Local farmers are also finding it difficult to compete with imported brands whose prices are more competitive and attractive to consumers.
Reports coming out from Carlifornia suggest the weather situation is expected to worsen. This is concerning for tomato farmers in the country as tomato yields in California could decline by about 6% over the next decade. Planting for the coming season is set to commence in December, and many farmers are looking to the season with caution as another year of adverse weather conditions looms over their farms.