What's Behind That Tomato's Price?
Late summer in the Midwest is tomato season. For tomato growers around that country, it’s time to pick their bounty and calculate their earnings.
While sun and rain might be free, tomato farmers have to carefully weigh everything else they put in to growing their crop. Research and the development of new tools – from novel seed varieties resistant to diseases to additional fertilizers – has changed the input costs for growers.
U.S. farmers grow about $2 billion worth of tomatoes annually, according to the U.S. Department of Agriculture, though production numbers have steadily decreased over the past decade. In 2004, the U.S. produced 1.7 million tons of tomatoes. Last year, that dipped to 1.1 million tons.
While California and Florida account for almost two-thirds of U.S. production, Midwest tomato farmers grow millions of pounds of their own.
At Herman’s Farm in St. Charles County, Mo., Elsie and Tom Goeke grow a variety called Red Deuce – and they’re huge. Tom Goeke picks up a tomato the size of a small teapot just in from the field.
“Isn’t that sad?” he says. “Look at that. How beautiful it is and it just split.”
A crack runs the length of the tomato from top to bottom. Goeke says all of the rain this summer pushed the fruit to grow too quickly while it ripened on the vine.
“Now it’s not good anymore and we just have to throw it away,” he said. “But what a saint. Look how beautiful. Look how thick they are.”
Labor costs down
Although the rain has cost the Goekes a few tomatoes, they’ve had a successful growing season so far. Tom Goeke says it costs him about $15,000 to put in an acre of tomatoes. This year he planted three acres. At about five thousand plants per acre, he’s a midsized grower with at least 15,000 plants.
Walking through the rows of bushy green vegetation, he pulls away some of the branches to reveal bunches of thick, orange tomatoes a few days away from picking.
“Notice how thick they’re hanging on here,” he said. “We’ve been picking on this block of tomatoes for the last five weeks. And they’re still producing.”
Goeke grew up in a tomato farming family. He says the cost of labor has dropped dramatically since he was a kid thanks to advances in technology and equipment. Just a decade ago, he says, each tomato plant had to have its own a stake. Now they stake every few plants and run twine between them for support.
“There’s only 20 percent of the labor that goes into raising this acre of tomatoes than there was 25 years ago,” Goeke said.
Prices go up with technology
Not all costs have dropped, though. Seed that use to cost $16-an-ounce can go for 100 times that today.
“But now they’ve got so much more disease resistance built into them that you don’t have to give them so much tender loving care that you did years ago because they were so touchy,” Goeke said.
Advancements in fertilizer and fungicides have forced farmers to dig deeper into their wallets. Goeke says his chemical bill used to run him about $7,000 dollars for 30 acres. Now, that amount would only cover about eight acres.
“A sack of fertilizer, 20 years ago, was $5,” he said. “Now it’s $25. And it goes on and on.”
Running a tomato farm is risky, Goeke says. A bad year of pests and you’re out thousands of dollars. But, those pricier products help protect his livelihood by keeping his plants healthy and productive.
“If I average a buck to a buck and a half per pound – and I pretty much do – and if everything works out well – I don’t have any hail or anything like that – I could possibly pull easily 50,000 pounds and actually gross that much money off an acre of tomatoes,” he said.
That’s 50,000 pounds per acre in a good year. Wholesale, each pound goes for $1.50. At the grocery store, though, you’d probably see his tomatoes priced at about $3.