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The United States is one of the world's leading producers
of tomatoes, second only to China. Fresh and processed
tomatoes account for more than $2 billion in annual farm
cash receipts.
The U.S. fresh-and processing-tomato industries target
different markets, which is not true in many other tomato-producing
countries. Characteristics of the two industries in the
United States are:
- Tomato varieties are bred specifically to serve the
requirements of either the fresh or the processing markets.
Processing requires varieties that contain a higher
percentage of soluble solids (averaging 5 percent to
9 percent) to efficiently make tomato paste, for example.
- Most tomatoes grown for processing are produced under
contract between growers and processing firms. Fresh
tomatoes are largely produced and sold on the open market.
- Processing tomatoes, which accounted for 89 percent
of all tomatoes produced in 2008, are machine-harvested
while fresh-market tomatoes are hand-picked.
- Fresh-market tomato prices are higher and more variable
than processing due to larger production costs and greater
market uncertainty.
Fresh Tomato Industry
Commercial Acreage. Fresh-market tomatoes
are produced in every State in the Nation, with commercial-scale
production in about 20 States. National fresh-market tomato
acreage has been trending lower over the past several
decades. California and Florida each produce fresh-market
tomatoes on 30,000-40,000 acres—almost two-thirds
of total U.S. fresh-tomato acreage (a share that has not
changed much since the 1960s). Ohio, Virginia, Georgia,
and Tennessee round out the top six in terms of area planted.
Production. U.S. fresh field-grown tomato
production has trended higher over the past several decades
with the most substantial growth occurring during the
1980s. As they have for decades, Florida and California
annually account for two-thirds to three-fourths of all
commercially produced fresh-market tomatoes in the United
States. Including processing, Florida is the second-largest
tomato-producing State; except for 2008, it has been tops
in producing fresh-market tomatoes for decades. Florida's
season, October to June, has the greatest production in
April and May and again in November to January.
California is the leading producer of all tomatoes in
the United States, accounting for 96 percent of U.S. processing
tomato output and one-third of the fresh crop. Fresh-market
tomatoes are produced across the State in each season
except winter. California's share of national fresh-market
output has remained between 25 and 37 percent since the
1980s. Other major fresh-market tomato-producing States
(in order of importance) include Virginia, Georgia, Ohio,
Tennessee, North Carolina, New Jersey, and Michigan.
Seasonality of Supply. Commercial fresh-market
tomato shipments peak in the spring when Florida's volume
is highest and California and various southeastern States
begin to ship tomatoes. Commercial volume is smallest
and prices are lowest in August to September due to the
availability of local tomatoes. Fresh-market tomatoes
are available year-round in the United States because
imports supplement tomatoes grown in Florida and in scattered
greenhouses in the winter. Florida's winter crop is largely
shipped to markets in the East, while the bulk of Mexico's
crop is shipped to western States.
Market Structure. Supermarkets carry many
varieties of fresh tomatoes. In addition to displays of
the standard field-grown round tomatoes, shoppers find
plum (Roma) tomatoes, grape and cherry tomatoes, and an
array of greenhouse and hydroponic tomatoes in most areas
of the country. Some greenhouse/hydroponic tomatoes (which
were initially imported from places like the Netherlands)
are marketed "on vine" (in clusters) to convey
the appearance of freshness to consumers.
Domestic producers have recognized opportunity in this
market niche. As a result, new or expanded greenhouse/hydroponic
operations in several States have begun production over
the last several years. (Domestic hothouse vegetables,
however, are not included in official USDA annual production
estimates but allowances are made for them in ERS consumption
statistics.)
Some estimates suggest that the U.S. fresh-tomato market
is about evenly divided between foodservice and retail
consumer sales. However, in terms of total consumption
from all sources, about 70 percent is consumed at home
with 30 percent consumed away from home, according to
a mid-1990s USDA food intake survey (the most recent survey
with this breakout).
Prices. Statistical analysis suggests that
the retail
price of field-grown tomatoes is linked directly to
the shipping-point price. Changes in the U.S. shipping-point
price for tomatoes change retail prices for that month
and the next month. Retail tomato prices include marketing
costs such as wages, transportation, containers, advertising,
fuel and power, and rent.
On average, the shipping-point
price for fresh field-grown tomatoes averages about
one-fourth of the retail value. This share
has declined during the past three decades, averaging
37 percent in the 1980s, 31 percent in the 1990s, and
28 percent the first decade of the 2000s. Shipping-point
prices for field-grown tomatoes have frequently been under
pressure since the mid-1990s, largely due to increased
imports and competition with hothouse products.
Trade. International trade is an important
component of the U.S. fresh-market tomato industry. Imports
account for about one-third of U.S. tomato consumption,
up from one-fifth in the early 1990s. The percentage of
U.S. fresh-tomato supply that is exported
has slipped to about 6 percent this decade after having
been a relatively constant 7 percent since the 1980s.
Over the past decade, greenhouse/hydroponic products
have made significant inroads into the U.S. fresh-tomato
retail market. Imports from Canada's hothouse tomato industry
peaked in 2005 but have weakened with rising competition
from Mexico. Mexico has invested heavily in protected
culture of vegetables, resulting in a larger share of
the U.S. import market. Mexico now accounts for 71 percent
of the U.S. import market for greenhouse tomatoes, while
Canada's share has been reduced by half to 27 percent.
Florida and Mexico historically compete for the U.S.
winter and early spring market. Imports from Mexico tend
to peak in the winter when southern Florida is the predominant
U.S. producer. Florida tomatoes then dominate the market
during the spring as Mexican production seasonally declines.
Mexico remains the primary source of U.S. tomato imports
and has rebuilt market share lost earlier this decade
by shifting more heavily into greenhouse/hydroponic products.
Greenhouse tomatoes, in fact, have taken a greater share
of the U.S. fresh-market tomato industry. About three-fourths
of U.S. fresh tomato exports are shipped to Canada, with
exports to Mexico a distant second. A small volume is
also exported to Japan—a market that was closed
to U.S. shippers by phytosanitary restrictions (tobacco
blue mold) from 1951 until 1997.
The U.S. Department of Commerce suspended an antidumping
investigation involving fresh-market tomatoes from
Mexico, by negotiated agreement, on November 1, 1996.
The agreement set a minimum price (called the reference
price) that covers the majority of fresh-market tomatoes
imported from Mexico. The intent of the agreement is to
ensure there is no undercutting or suppressing of fresh-market
tomato prices in the United States. Fresh-market tomatoes
cannot enter the United States at less than the established
reference price. Subsequent amendments clarified and expanded
original provisions. The tomato season is now split into
two periods—each with a separate reference price.
California and Baja, Mexico are covered from July 1 to
October 22 ($4.30 per 25-pound box), while Florida and
Sinaloa, Mexico are covered from October 23 to June 30
with a higher floor price ($5.42 per 25-pound box). The
latter floor price was put into effect upon review/renewal
of the suspension agreement on January 22, 2008.
Per Capita Use. In terms of consumption,
the tomato is the Nation's fourth most popular fresh-market
vegetable behind potatoes, lettuce, and onions. Although
stabilizing in the first decade of the 2000s, annual average
fresh-market tomato consumption remains well above that
of the previous decade. Over the past few decades, per
capita use of tomatoes has been on the rise due to the
enduring popularity of salads, salad bars, and bacon-lettuce-tomato
(BLT) and submarine (sub) sandwiches. Perhaps of greater
importance has been the introduction of improved tomato
varieties, heightened consumer interest in a wider range
of tomatoes (such as hothouse tomatoes, grape tomatoes,
and specialty/heirloom varieties), a surge of new immigrants
who eat vegetable-intensive diets, and expanding national
emphasis on health and nutrition.
Processing Tomato Industry
Commercial Acreage. Over the past several
decades, the processing-tomato industry has been moving
westward. California accounts for about 94 percent of
the area harvested for processing tomatoes in the United
States—up from 87 percent in 1990 and 79 percent
in 1980. Texas, Utah, Illinois, Virginia, and Delaware
once harvested thousands of acres, but today they have
little or none.
Production. California has long been the
primary source of processed-tomato products in the United
States. By itself, California leads the world in the production
of processing tomatoes. Harvest of the California processing-tomato
crop is most active August to September. About 96 percent
of U.S. processing tomatoes are grown and processed in
California, with Indiana, Ohio, and Michigan accounting
for most of the remaining production.
Market Structure. Growers contract with
processors to process red-ripe tomatoes. Although many
firms manufacture pulp-based products, such as stewed
and diced tomatoes, most initial processing is by firms
that manufacture tomato paste, a raw ingredient. Paste
is manufactured and packed in bulk containers— large
bags set into boxes and barrels—and stored for use
up to 18 months later. This raw ingredient is distributed
under contract or sold to remanufacturing firms that add
water, spices, etc. to make retail and foodservice packs
of soups, sauces, catsup, and paste.
In the past, many firms made paste and also remanufactured
this paste into other products. The industry appears to
be polarizing, with several firms specializing in the
manufacture of bulk industrial paste and others specializing
in the remanufacture of industrial paste into consumer
products. Several California firms are also producing
various dried and dehydrated tomato products, such as
whole dried tomatoes and tomato powder.
Trade. Exports
are becoming an important component of the U.S. processing-tomato
industry. During the early 1990s, the United States became
a net exporter of processed tomato products and has remained
so. About 8 percent of processed-tomato product supply
has been exported from 2000-08, up from 5 percent during
the 1990s and 1 percent during the 1980s. Top U.S. export
markets include Canada (which takes about half of all
volume), Mexico, Japan, South Korea, and Italy. Generally,
tomato sauces account for the largest share of exports,
followed by paste, catsup, and canned whole products.
About 6 percent of the tomato products consumed by Americans
today are imported.
During the 1990s, imports averaged about 4 percent of
consumption, down from 7 percent during the 1980s. In
most years, Canada has been the largest exporter to the
United States, accounting for more than 40 percent of
imported processed-tomato products—mostly catsup.
Other important sources of tomato products are Italy,
Mexico, China, and Israel. In years with short crops,
tomato paste can account for a significant share of import
volume. However, sauces and catsup are usually the top
tomato-product imports.
Per Capita Use. Americans consume three-fourths
of their tomatoes in processed form. U.S.
consumption of processed tomatoes began a steady climb
that accelerated in the late 1980s with the rising popularity
of pizza, pasta, and salsa. ERS estimates suggest the
largest processed use of tomatoes is in sauces (35 percent),
followed by paste (18 percent), canned whole tomato products
(17 percent), and catsup and juice (each about 15 percent).
ERS estimates suggest that about one-third of all processed-tomato
products are purchased away from home at various foodservice
outlets (pizza parlors, for example).
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