domestic carryoverFollowing the problem-stricken 2013 crop, the California industry has improved tomato paste inventories with the 2014 pack coming in according to forecast. Despite some regions affected by wet weather, the world crop was also boosted compared to last year, primarily lifted by China, California and Spain.

In California, market pricing remains steady in the high $0.40’s per pound for 31% NTSS tomato paste in a bin. This is a relatively high price compared to recent years, and reflects the high price paid for tomatoes of $83/ton, as well as lingering impacts of depressed marketing years from 2011-2013. Uncertainties about water supplies are contributing to the unstable pricing picture despite slightly improved inventories.

Our projections indicate that there will be slightly more than two months of tomato paste supply in inventory when the 2015 pack begins compared to last year’s average of three months. This is approximately in balance with expected demand; assuming that worldwide growth for paste-based products continues at about 2% typical of recent years.

For 2015, clouds may be lurking on the horizon in the form of regulations on water use. Morning Star’s growing production capabilities in Williams, located in the growing region north of the Sacramento Delta, will help mitigate water concerns and help to provide our customer-partners with the products they need to satisfy their requirements.

annual change in pricing for california paste industry

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