Cancel OK

Tomato prices rise, showing signs for strong Q4

The tomato industry has weathered the pandemic well, and this fall, both volume and prices are higher than the past two years.

One of the most sensitive commodities in the produce industry and a reliable indicator of how the industry is performing, may be the tomato.

Since this is an extremely popular item and is one of the most affected by supply and demand, it can be considered as a thermometer of the produce industry.

During 2020, this industry has had highs and lows, but after the lockdown, analyzing the second half of 2020, we can observe that this category is recovering extremely well.

This commodity is also grown in many regions. In the second half of 2020 the supply has come from 13 different regions. As we approach the end of the year, we will see changes in regions and market share.

Blue Book has teamed with Agtools Inc., BB #:355102 the data analytic service for the produce industry, to look how a fruit or vegetable fared in 2020 and what it should expect next year.

MARKET SHARE BY MAIN REGIONS AND VARIATION VS. 2019 IN THE SECOND HALF OF 2020

This year has affected many industries, but in the case of the tomato, it is a different story.

After the pandemic and lockdown effect, this market has grown 20 percent in the second half of 2020.

Almost every region has registered volume increases over 2019. This seems to be a good example of the recovery of the economy in the second half of 2020.

TOTAL VOLUME OF TOMATOES FROM JULY 1ST THROUGH OCTOBER 20TH

The graph shows that every week of the second half, the volume has been higher than in 2019 and 2018, and it shows a slight upward trend, with no peaks and valleys.

The supply continues to be steady. It is an indicator that the economy is in a strong recovery. Hopefully, this trend will continue over the remainder of 2020.

WEEKLY VOLUME OF THE 4Q OF 2019

Taking an overview of the trends in the last quarter of the last three years, we observe that the behavior is very steady. Even during Thanksgiving week, the demand continues with no highs nor lows. If this behavior is repeated in 2020, we can say that this semester will bring excellent news for the tomato industry.

F.O.B. PRICE IN MCALLEN TX FOR CONVENTIONAL TOMATOES 5X6 FROM MEXICO

When talking about pricing in the second half, July, August, and mid-September had small variations, between $10 and $16. After the second week of September, the market has increased drastically, and recently is over $24.

With this trend in pricing, and the volume still strong, it is an indicator that this month will be very profitable for the industry.

CHICAGO TERMINAL MARKET PRICE FOR TOMATOES FROM MEXICO SIZE 4X5

Similar to the F.O.B. prices, the Chicago terminal market price was steady until the third week of September, when it changed, and prices jumped up to $34.

This price is much higher than the two previous years. If this effect continues for several weeks, and the volume stays steady, it will contribute to improve profits for the distributors of this category in a turbulent year 2020.

Raul Lopez is Mexico Director for the Agtools team and is a Member of the PMA Council in Mexico. He’s an Agronomist from Tecnologico de Monterrey with a degree in International trade.