Trump said he doesn't see a recession after the bond market spooked investors and the Dow suffered its worst day of the year last week.Marketsread more
Americans now say they approve of free trade by 64%-27%, a margin of better than two to one. That's up from 57%-37% early in Trump's presidency, and 51%-41% near the end of...Politicsread more
Stocks in Asia edged up Monday morning as U.S. Treasury yields bounced higher after plunging last week which sent markets into a panic.Asia Marketsread more
Beijing wants to use reforms to support a slowing economy.China Marketsread more
Trump said Cook made a "good case" that it would be difficult for Apple to pay tariffs, when Samsung does not face the same hurdle because much of its manufacturing is in...Technologyread more
The yield on the benchmark 10-year Treasury note briefly fell below the 2-year rate on Wednesday, a phenomenon in the bond market known as yield curve inversion, which is...Marketsread more
Despite aggressive strides, Waymo needs one thing before their self-driving cars become a seriously useful transportation system: people. We talked to the ones closest to it.Technologyread more
"I don't want to do business at all because it is a national security threat," Trump told reporters.Technologyread more
Trump's is due to visit Copenhagen early next month, when the Arctic will be on the agenda in meetings.Europe Politicsread more
The MacBook Pro recall and its subsequent ban from flights underscores the increasing brand risk from problems with lithium-ion batteries.Technologyread more
Experts say the timing of Amazon executives' contributions to Rep. David Cicilline likely reflect the company's heightened urgency over growing regulatory scrutiny.Technologyread more
These are rotten times for California's tomato farmers as an oversupply of processed tomatoes and weaker demand have pushed prices lower.
"Margins are pretty thin this year," said Bruce Rominger, who grows tomatoes just outside the Northern California town of Winters. "If you don't have a good yield, you won't make any money this year."
After two consecutive years of increased production, tomato processors this year cut the size of contracted tonnage with California growers by nearly 10 percent from a year ago, according to the U.S. Department of Agriculture. Processors coupled the downsizing with a reduction in the contracted price by about 12 percent from last year.
Tomato producer Mark Borba in Huron, California, said the grower price for tomatoes "helped farmers make a decision. In many cases, it's not economic. Processors said the only way we can get this industry healthy again is to cut back on our processing and liquidate some of our inventories."
California produces more than 95 percent of the nation's processed tomatoes and about one-third of the world's crop. Processed tomatoes get turned into everything from tomato paste, soup and sauces to salsa and ketchup.
"Our costs have gone through the roof, principally the water, and our price from the processors has been cut," said Borba, who is in the middle of harvesting his tomato crop in the San Joaquin Valley — the state's major agricultural region and epicenter of the drought.
For this season, processing tomato growers in California received a $72.50 per ton contract price from processors for their crop compared with $80 a ton last year.
"They are going through a down cycle now," said California farm economist Vernon Crowder at Rabobank in Fresno. "Processors have had to cut back, and to get farmers to grow less tomatoes, they have offered a lower price."
Earlier this year, ConAgra Foods closed a tomato processing plant in the town of Helm, California, but continues to process tomatoes at a Northern California plant in Oakdale.
"We closed the facility in Helm so we could operate the overall business more efficiently," said Daniel Hare, a spokesman for Omaha-based ConAgra.
The drop in California production comes as global prices for the processed tomatoes remain weak due to an overabundant crop in Italy, which was the world's second-largest producer until 2014 when China passed it.
Worldwide, farmers produced more than the market could handle last year, so many of the processors, including U.S. companies, found themselves with relatively high levels of tomato paste.
"It looks like things will probably get back in line, although with the slowing economy there is some concern even with the reduced production we will still end up with excessive inventories," said Borba.
International markets can represent up to 30 percent of California's crop, but Rabobank's Crowder said a strong dollar makes the tomato-based product more expensive abroad and has contributed to the inventories going up "really high."
"The industry is pretty darn flat worldwide," said Chris Woolf, a partner with Los Gatos Tomato Products, a vertically integrated producer and processor of tomatoes. "The market just doesn't jump up and down much for tomato paste."
Woolf said the Huron, California–based company earns a profit from growing the tomatoes and is essentially break-even on the processing side where it turns the crop into tomato paste. "There's definitely more upside in growing tomatoes than, say, cotton on the market," he said.
French fries and pizza help make tomatoes (fresh, canned or processed) the second-most commonly consumed vegetable after potatoes. (While tomatoes are botanically considered fruits, the USDA collects and reports data on them as a vegetable.)
And tomatoes represent a sizable portion of the total cost of goods sold for some U.S.-based multinational food manufacturers.
As a food commodity, tomatoes are about 9.4 percent of Campbell Soup's cost of goods sold and 4.1 percent of ConAgra's costs. Other companies with 1 percent or more exposure to tomato costs are Kraft Heinz and J.M. Smucker.
According to the USDA, around three-fourths of the tomatoes consumed by Americans are processed, with sauces the largest use (35 percent) followed by paste (18 percent). That's then followed by canned tomatoes (17 percent) and ketchup and juices (each about 15 percent).
Ketchup alone is a $6 billion business globally, according to Euromonitor.
ConAgra's Hunt's brand is the nation's second-largest ketchup in terms of sales, with a nearly 15 percent market share in 2015, while Heinz is tops with about 62 percent share, according to Euromonitor.
Meantime, U.S. ketchup volumes were down 0.1 percent last year and pasta sauce volumes fell 3.6 percent, according to figures from Euromonitor. The latest Nielsen figures show ketchup seeing unit declines of 4 percent this month and almost 1 percent in the latest year.
There's also weakness in pasta sauce volumes in the latest 52-week period, according to Nielsen data.
Nobody is suggesting Americans are giving up their love of tomato pasta sauce or ketchup on french fries. Yet there's been a general trend by health-minded consumers to eat fewer processed foods and more fresh foods.
"While there has been a recent shift of consumers opting for fresh tomatoes rather than processed tomato-based products, there are growth opportunities for manufacturers," according to Jordan Rost, vice president of Consumer Insights for Nielsen.
"These opportunities are reflected in the rise of multicultural cuisines and gluten-free flours that enable greater consumption of foods like pizza, to the growing, renewed popularity of pasta," he said.