Lighting is being installed in an increasing share of the Dutch acreage devoted to the cultivation of tomatoes. This has an impact on prices. Three years ago, they reached over 200 Euro/100 kg. In recent years, the price does not exceed 160 Euro/100 kg. Despite this, the acreage with lighting continues to grow.
Earlier this century, lighting was still not profitable, but with the newest lamps it has become possible to grow tomatoes all year round. The tomato grower Lans was the first ever company to supply all year round thanks to the use of lighting. By 2006, according to the LEI, already 140 hectares were equipped with lighting. The greatest expansion has taken place over the past five years. In 2013, there were already about 400 hectares (20% of the acreage) and installers estimate that the lighted acreage this year in the Netherlands grew by 10%, reaching over 550 hectares.
The main export destination for Dutch tomatoes is Germany. German consumers prefer purchasing German products, but in Germany there is no year round supply of tomatoes. Generating your own energy is still heavily taxed, and partly because of this it is not interesting to generate energy for lighted cultivation. If there is no supply of German produce, Dutch tomatoes are better valued in terms of prices than Spanish and Moroccan imports. Market figures (BLE) for week 2 show that 1.49 Euro were paid for Spanish on the vine tomatoes, compared to 1.69 for the Belgian and 1.74 for the Dutch. If prices increase, as was the case in week 3, the price for Dutch tomatoes rises to 2.25 Euro, while the Spanish produce stops at 1.80. If the quality of the Spanish and Moroccan supply drops, the price difference during the lighting season can be of up to 1 Euro per kilo.
The price of Dutch tomatoes grown with lighting is substantially higher than that of the Spanish and Moroccan produce. A report by McKinsey on the position of Dutch greenhouse horticulture shows that one package of Dutch tomatoes, including processing and logistics costs, reaches the German market at 1.50-1.70 Euro. Meanwhile, the Spanish production in Germany stands at 0.90-1.00 Euro and Morocco's produce costs between 0.70 and 1.20 Euro at supermarkets.
Choosing lighting
The higher prices in the winter season are another one of the reasons to choose lighting. One of the few new developments in Dutch horticulture, belonging to the tomato nursery Agro Care, is also equipped with lamps. "In summer there are more than sufficient tomatoes," says director Kees van Veen. "But I think there is still room for growth in the winter; therefore, we are studying switching to another crop during the summer and to be on the tomato market when it is not as saturated."
Another issue is that many tomato nurseries are equipped with combined heat and power generation, with gas being used to generate both electricity and heat. The heat was used for the crops and the electricity was supplied to the grid. That situation now has changed. Electricity prices have dropped so much that it is no longer profitable to use cogeneration. Installing lighting is one of the ways to still use electricity in a cost-effective manner. A third argument is the retention of customers. "The Netherlands always ensures a safe, quality product," said Maurice Langeslag, of ZON Fruit & Vegetables. This is interesting for both sales organizations and growers, as "with year round supply of a quality product, we do not lose market share in the changing seasons."
Market under pressure
The expanding lighted acreage obviously also has a downside. According to traders, the market is under pressure and the situation is no longer as good as a few years ago. The Spanish supply is qualitatively better and there is simply more and more Dutch produce in the winter season. And if Spanish prices are low, this naturally also affects the price of Dutch tomatoes. "The products can't really be compared, but we notice it," said a trader. This is clearly reflected in the growers' prices, published by the LEI. In the winter of 2010/2011 and 2011/2012, Dutch tomatoes still reached peaks of more than 200 Euro per 100 kg. Over the past two years, prices have remained at around 160 Euro per 100 kg.
Opportunities
In the winter, however, there are still opportunities. In the Netherlands, on the vine regular and cherry tomatoes are the most commonly grown using lighting. For these, the product's freshness is important; on the vine tomatoes from Spain or Morocco lose quality, while loose produce still looks good after a week's transport. Further diversification can entail opportunities to expand the market. Furthermore, the preference for local produce still offers opportunities, as well as the demand for safe, waste-free produce. Prices, however, will remain a stumbling block, and this can easily be seen at major supermarkets. Although there is sufficient year round supply from the Netherlands, select major retailers prefer to fill the shelves with Spanish produce. Between week 46 and week 16, there is a preference for Spanish or Moroccan tomatoes. Only Lidl currently prefers to be supplied year round by Dutch producers.