CALIFORNIA AGRICULTURAL EXPERIMENT STATION CIRCULAR 369 JUNE, 1947 CANNING TOMATOES SITUATION IN CALIFORNIA, 1947 WALTER D. FISHER 25 CAN* PER- C/ D L.P TC IT A IA C TC V )E< 11 > > IA \is N ID C P O R( N DC SI >U CT \p — S: Tl UNITED ON, 191 S' 8- rA 19 TE 4 S 6 * '.'* ^«35|k 1 .< 20 f ■— t :5 i- ^As.sfORf' ,<* y O < F Ui > k £ 15 __J( 11 S ^ < CA *JNE 3 TO MAI OFS u. § » o •■-■■•- a. r,t 10* ^ i' J 5 kkb ^i 1918-20 1921-25 1926-30 1931-35 1936-40 1941-45 1946 AVERAGES EST. THE C O L L E O EOF A Q R I C U L T U R E UNIVERSITY OF CALIFORNIA * BERKELEY #, CAHHIHG WMTOiS We SITUATION In the past twenty-five years, and particularly during World War II, consumption of tomatoes and tomato products has in- creased greatly, both in California and in the United States as a whole. This demand is the result of population growth, chang- ing food habits, and higher incomes. California now produces over one third of the country's canning tomatoes, and puts up a large percentage of the coun- try's pack of tomato paste and sauces. Its 1946 crop was the largest in history. The state's main producing areas are the counties surround- ing the Delta and San Francisco Bay. we OUTLOOK Some, but not all of the expanded production will continue. The over-all picture depends on national consumer income, a factor which cannot be accurately predicted. Since the 1946 crop was so large, canners' demands for 1947 will be below those of the previous year. With these facts in mind, both growers and canners should keep informed on economic trends in the nation as well as conditions in their own localities. CANNING TOMATOES Situation in California, 1947 Walter D. Fisher 1 The canning tomato crop in California is an important part of the agricul- ture of the state. In 1946 the dollar value of the crop on the farm was 10.4 per cent of the value of all vegetable and melon crops and was second only to lettuce. Tomatoes are even more important to California canners. Of the total pack of canned vegetables in California in 1946, 79 per cent were products from tomatoes, and of the pack of all fruits and vegetables combined, the frac- tion was 39 per cent. FIG. i: ACREAGE IN CANNING TOMATOES- UNITED STATES AND CALIFORNIA 600 400 200 1918- 1946 THOUSAND ACRES o o o o o o United States-^ ) i i V\ 1 1 1 J / / t * \ -\ \ \ \ > / / / * s 1 I / / \ 1 \ i \ i V - \ 1 V California-^ \ - n 1920 1925 1930 1935 1940 1945 Tomato growers need to know the market situation in order to plan their future operations. To arrive at correct conclusions, growers should estimate not only the prospects for tomatoes but also for the other crops that can be grown on the same land— sugar beets, for example. They should also estimate the relative costs of producing these crops. This circular, because it considers tomatoes alone, gives only a part of the information needed by the tomato grower. Some data on other crops has been published, and more information will appear in future circulars. 1 Instructor in Agricultural Economics, Junior Agricultural Economist in the Agricultural Experiment Station and on the Giannini Foundation. [31 California Experiment Station Circular 369 United States production has Increased great- ly . , . California shows the sharpest rise, espe- Trend of Growth.— In the last twenty-five years, acreage in canning tomatoes has expanded greatly in the United States (see fig. 1) . In California this expansion has been so great that in 1946 the 132,000 acres harvested was almost double the 1936-1940 average of 68,000 acres. This average of 68,000 acres is more than double the 1921-1925 average of 23,100 acres harvested. Yields per acre of tomatoes have also tended to rise steadily. California yields are consistently higher than the United States average (fig. 2). In 1946 California yields set a record high of 10.1 tons per acre, which was due to extremely favorable weather conditions. In the last ten years the percentage increase of tomato acreage and produc- tion has been higher in California than in the United States as a whole (fig. 3). In both cases the percentage increase in production is greater than the per- centage increase in acreage. This fact is due to increasing yields per acre. Regions Within the United States.— In the last ten years California has in- creased its relative position as a producer of canning tomatoes in comparison with other parts of the United States. During the years 1941-1945, California produced 29 per cent of the United States tonnage (fig. 4). This is a slight increase over California's share of production in the five years 1936-1940. In 1946 the state's production was 38 per cent of the United States total. Cali- HG. 2: YIELD PER ACRE OF CANNING TOMATOES UNITED STATES AND CALIFORNIA 1918 - 1946 1920 1925 1930 1935 1940 1945 Canning Tomatoes FIG. 3: PERCENTAGE CHANGES IN ACREAGE AND PRODUCTION OF CANNING TOMATOES : 1918 - 1946 (1921- 1925 = 100) 6001 l l : — I 1 1 1 — I 600 400 200 100 ACREAGE - California-^ •— n /^^ - - \> * RODUCTI 5N / - / - - - California^ 0--.^^s^---— **^ POTATOES -S* 140 120 100 80 60 1909 1915 1916- 1920 1921- 1926- 1925 1930 AVERAGES 1931- 1935 1936- 1940 1941- 1944 spend on various foods, and is a decisive influence on the market demand for tomatoes. Consumer income depends on the economic health of the entire country, and has had its ups and downs in past years (fig. 8). Growers will remember the effects of low income on the demand for farm products during the depression years of the early 1930's. During the war, on the other hand, income rose to a new high— averaging 120.2 billion dollars per year during the years 1941-1945, and reaching 144.5 billion dollars in 1946, the highest figure in history. This unprecedented increase in consumer income and the main- tenance of price ceilings caused the all-time record high consumption of tomato products during the war years. Eating Habits.— Eating habits in recent years have shifted toward foods lower in calories per unit weight, but higher in vitamins, minerals, and animal Tabled UNITED STATES PER-CAPITA CIVILIAN CONSUMPTION OF TOMATO JUICE AND COMPETING ITEMS Period Tomato juice All canned fruit juices Fresh oranges Per cent (1936-1940 = 100) 1918-1920 3.0 44.3 100.0 137.8 172.2 7.8 5.7 10.7 25.1 100.0 132.6 225.6 1921-1925 58.5 1926-1930 68.4 1931-1935 86.1 1936-1940 100.0 1941-1945 142.7 1946 (estimate) 150.3 12 California Experiment Station Circular 369 proteins. People are eating more fruits and vegetables, more dairy products, less of wheat and grain products, and fewer potatoes than they did twenty-five to thirty years ago (fig. 9). This change has been partly due to more people living in cities and working indoors, and partly due to lower costs in trans- porting and handling fruits and vegetables. Tomato products also have re- cently been used to an increasing extent in infants' and children's diets. Canned tomatoes in solid form have been meeting strong competition from other canned vegetables and from fresh vegetables in the consumer's diet. Dur- ing 1941-1945 consumption of canned tomatoes was only 83 per cent of what it had been during 1936-1940, while consumption of all canned vegetables increased 17.5 per cent and all fresh vegetables marketed commercially in- creased 5.9 per cent (table 2). Tomato juice also meets strong competition from other canned juices and from fresh orange juice. Comparing again the five-year period 1941-1945 with 1936-1940, per-capita civilian consumption of tomato juice increased 37.8 per cent, canned fruit juices, 32.6 per cent, and fresh oranges, 42.7 per cent (table 3). (A large percentage of fresh oranges sold is consumed in the form of orange juice.) The years 1941-1945 stimulated production for the armed services and increased civilian con- sumption at the same time decent War Production Diversion for War Purposes.— World War II caused a large expansion of to- mato production. In order to meet the requirements of the armed services and the lend-lease program for canned tomatoes and products, processors were required to set aside a percentage of the pack for priority of sale to government agencies. To assure production of the necessary tonnage of fresh tomatoes, the government announced official support prices to growers. FIG. 10: UNITED STATES SHIPMENTS OF CANNED TOMATOES AND PRODUCTS TO CIVILIANS AND FOR WAR AND EXPORT 1936 - 1946 100 1 i 1 1 1 1 100 1936-37 1938-39 1940-41 1942-43 1944-45 1946-47 Canning Tomatoes Table 4 13 UNITED STATES ! SHIPMENTS—! SUMMARY* Averages Total shipments Exports and war services To civilians Million cases (basis, 24 No. 2 cans) 1936-37 to 1940-41 58.2 86.1 81.3 90.3 -0.8f 18.1 6.0 3.1 59.1 1941-42 to 1945-46 68.0 1945-46 75.3 1946-47 (estimate) 87.2 * Does not include tomato soup and other miscellaneous products. t Net imports, not shown in figure 10. The increase in production of canning tomatoes during the war was so great that even after diverting a large fraction of this production for export and war services, civilian consumers within the United States ate more than ever before (fig. 10). Shipments of canned tomatoes and other products from canners' and wholesalers' stocks (excluding tomato soup and miscellaneous products) dur- ing the period 1936-1940 averaged 58.2 million cases per year; this increased to 86.1 million cases per year during the period 1941-1945 (table 4). Ship- ments to United States civilians in 1936-1940 (including a small quantity of imports) averaged 59.1 million cases per year and increased to 68.0 million cases in the period 1941-1945. This period included the point-rationing pro- gram for canned fruits and vegetables but also included a number of months when there was no rationing. Of the various products, the war requirements were greatest for canned tomatoes. Shipments to civilians were cut sharply to meet these demands. Tomato juice shipments were cut to a lesser degree. In the case of the other tomato products, export and war shipments were not so important in com- parison with total shipments, and civilian consumption increased steadily throughout the war years. Stocks.— The increased consumption of tomato products during the war was achieved partly by drawing on stocks in the hands of canners and dis- tributors. From 1938 on, stocks declined steadily until in 1946 they had almost Table 5 UNITED STATES CARRY-OVER OF CANNED TOMATOES AND PRODUCTS* Averages Canned tomatoes Juice Other products Total stocks Million cases (basis, 24 No. 2 cans) 1936-1940 10.8 6.2 2.6 0.2 4.4 4.2 4.4 0.5 6.7 3.6 1.7 0.9 21.8 1941-1945 13.9 1945 8.7 1946 (estimate) 1.6 * Does not include tomato soup and other miscellaneous products. 14 California Experiment Station Circular 369 disappeared. Total stocks of canned tomatoes and other tomato products in hands of canners, wholesalers, and chain-store warehouses averaged 21.8 million cases during the years 1936-1940, fell to 13.9 million cases during the years 1941-1945, and fell further to an estimated 1.6 million cases in the summer of 1946 (table 5). These figures do not include stocks on the shelves of retail stores, restaurants, or homes. It is reasonable to suppose that these stocks have also dropped somewhat during the war years. Prices jtiitt - Growers' prices fend to follow those received by canners . . * government supports bolstered prices during the war Prices Paid Growers.— The prices that will be offered growers on contract, as well as the amount of acreage contracted, will reflect canners' opinions on the demand situation. If the demand for the product promises to be strong, then canners' demand for acreage is likely to follow suit. The better informed both parties are on the market situation, the more likely the contract is to be a fair one. The prevailing prices for canned products at the time of making con- tracts with growers give some (but by no means complete) indication of the profitability of the canning operation. During peacetime years in the past, there has been a fairly consistent relationship between prices received by canners for tomato products and prices paid growers (fig. 11). (In this figure both prices are taken as a percentage of the 1936-1940 average; the canner price index is a weighted average of quoted prices on six different items.) The Subsidy Program.— During World War II, in order to assure growers the support prices for raw tomatoes and still hold to OPA ceiling prices on FIG. 11: RELATIVE CHANGE IN CANNER PRICES FOR CANNED TOMATOES AND PRODUCTS AND PRICES PAID GROWERS 1926- 1945 200 180 160 140 120 100 80 (1936 - 1940= 100) r +~* PRICES PAID GR0WE 1 1 RS ^' 1 1 1 1 1 1 / / ^JyA ^CANNER PRICES t / 1 / 1 / 1 / 1/ i>CA * \ / X * \ / X. ^