California's drought, previously decreased demand and supply chain issues from the COVID-19 pandemic could have consumers across the country seeing red over much higher tomato prices.
That's according to reporting from The Washington Post on Wednesday. The outlet spoke with growers and economists who all shared the same message: Increased costs are going to be passed on to consumers.
"Growers will have the worst water situation ever by the end of this growing season," Ingomar Packing Chief Executive Officer Greg Pruett, whose company is based in Los Banos, told the paper. "The cost increases this year – in water, cans, all the other ingredients, labor, transportation – all those things add up to major cost inflation."
Nearly all of the state, which accounts for over 90% of canned tomatoes in the U.S., is experiencing severe drought conditions. The five counties that grow most of California’s tomatoes – Fresno, Yolo, Kings, Merced and San Joaquin – are all in the midst of exceptional drought.
Fewer growers, as a result, focused on using their remaining water to grow tomatoes.
On top of that, tomato processors had already been ordering fewer tomatoes after overseas demand decreased over the last half of the previous decade. Production costs across the board have increased, the number of tomato processing plants have declined and the market was flipped upside down early last year as retail demand skyrocketed and food service demand shrunk amid the pandemic.
The result? Far fewer tomatoes and, ultimately, far higher prices.
"This year will be some of (the) lowest inventory levels that we've ever seen," Frank Muller, the president of Woodland’s M Three Ranches, told the paper.
You won't just see increases at the grocery store, either.
Wells Fargo Chief Agricultural Economist Michael Swanson told the paper tomatoes’ omnipresence in pizza and pasta sauces, ketchup and other food-service staples will lead to higher prices at restaurants, too.
"It’s embedded in the menu board – but it is one more reason prices at Chipotle and Pizza Hut will go up," Swanson said.
If California water levels remain historically low, higher prices could extend into 2022.
More growers are turning to groundwater, diminishing the state’s reservoirs. Groundwater levels were much higher this year than they’re projected to be next year, which would only exacerbate the problems tomato production is experiencing.
"(This year) pales in comparison to what’s going to happen next year," Pruett told The Post.
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