Historically speaking tomato prices are not particularly good at the start of the European summer - but this summer it's a complete mess. Especially in the large segments of vine and loose tomatoes, the crisis is ongoing.
Flooded market
Saved, scattered or sold for a price lower than the packaging. It's all happening to tomatoes in the European market at the moment. The market is flooded.
In 2018 the acreage of Dutch tomatoes is higher than ever and exceeds 1,800 hectare, but due to the rising popularity of smaller sized tomatoes and the growth of illuminated acreage, this would not necessarily mean a record-breaking production in terms of kilos this summer. However, due to the temperature and the many hours of light, the productions have been way higher than normal: up to 15 per cent.
Crisis
“In the large segments of vine and loose tomatoes it’s one big crisis, and that’s been going on for a while now. Unfortunately I’d be willing to say it won’t become a good season anymore because of this longer period of bad prices,” Arie Middelburg of consultancy firm GreenMatch explained earlier this week. “Normally, price rises (and decreasing productions) occur in this month, and we can only hope this will also happen this season, because sales of vine and loose tomatoes can be called plain bad. The holiday period is never good for sales, and besides, productions aren’t just high in the Netherlands and Belgium, but local productions in various other European countries are also increasing.”
Germany
It might not come as a surprise but the German market is clogged as well. "Supplies from the Netherlands and Belgium flood the market and the German production hasn't lowered at all either", the German market watchers of BLE wrote about the market between July 30th and August 3rd. "Even though the demand was high, the oversupply hasn't shrunk. The price drops continuously and due to the intense competition, the price war was enormous."
With special offers for extremely low prices, there was an attempt to increase sales. "Not always successful, since at the same time batches without discount were offered. It was downright hopeless", they continue, reporting prices for TOVs of 2.25 euros per 5 kg crate. "Even the otherwise rather elite cherry tomatoes got under the wheels and were practically given away for 1 Euro / kg."
The prices in week 30 and 31 are still a bit higher than they were in 2015, when no more than 64 euros was paid for 100 kg TOVs.
Belgium
In Belgium, fruits and vegetables are scattered whenever the price reaches a certain low point. Pictures of this process caused an uproar in Belgian media this week.
According to Hoogstraten Cooperative's Director Gaston Opdekamp, this is an unfortunate situation. It is being spread by the media. "What happened is, in itself, not an unusual situation. It is a result of a market disruption," he says. "We are sitting with large volumes of unsold products. This is occurring with tomatoes and fruit-vegetables in a large part of Western Europe."
"When we have surpluses, we look for other markets. These include animal feed and bio-fermentation facilities. We, however, cannot supply these products in unlimited quantities. What the media did not report was that in the preceding five days, 4 tonnes of these products were given to social welfare organizations", says Gaston.
"People arrived quickly to see a whole heap of tomatoes that had not yet been incorporated into the soil. A couple of evenings ago, the vegetables were completely incorporated under the watchful eye of the Inspectorate. We would prefer healthy foodstuffs to end up somewhere else. This costs farmers and the sector money. This is our very last resort. This solution does, however, fall within the law", concludes Opdekamp.
Extra tomatoes for sale in the supermarket
Retailers also respond to the market situation. Dutch supermarket Plus published advertisements claiming to have saved 60,000 kilograms of tomatoes and offering them for 0.49 euro/kg. The current regular online price for TOVs at Plus is 2.14 euro/kg (1.07/500g).
In the advertisement the supermarket refers to helping out their growers Jansen Hoeven, Kwekerij van der Houwen, Gebroeders Duijvestijn and Tomatenkwekerij Van den Belt. "We like good food and we don't want it to be thrown out. Fighting food waste and helping growers are reasons for us to buy extra tomatoes."
Debbie Huisman with Plus explains how the supermarket also adjusted the required specs. "The taste is of course no different, but the lettuce crops currently are smaller, as well as apples, pears and broccoli with a slightly different shape."
In our Dutch publication growers responded annoyed with the Plus campaign. "Disgusting. Pretending to help a grower out by selling the produce way below the cost price. True help would be stimulating the sales for a fair price. Now it's only helping a grower get rid of their tomatoes and liquidity", a grower responds, and gets support from other growers. "60 ton tomatoes is the daily production of a grower - a drop in the bucket. And probably they're not paying good money for it either, so the grower will pay for it themselves. The rest of the year the 30% margins will reoccur."
Low prices not offset
Retailer Hoogvliet also responds to the crisis. They are offering a 5 kg carton for 2.49. "Help us help our grower", they tweet. In many other stores though, the low market prices are currently not reflected. In the online shops of the largest Dutch supermarkets, Albert Heijn (AH) and Jumbo, the prices are still EUR1.99/500g. Jumbo did announce to buy an extra 60,000 kgs of tomatoes as well.
Then there's Britain. The British supermarkets aren't budging at all. Produceview, a price tracker organization for the British supermarkets, reports a completely indifferent price for baby plum tomatoes over the last couple of weeks. The same goes for peppers and cucumbers. It appears as though the British supermarkets have broken down the relationship between the retail prices and the market prices completely, with only Aldi and Lidl offering a slight price advantage to consumers buying cucumbers these days.
Uplift coming
Due to lower production volumes and a rising market, caused by the end of the summer holidays, tomato prices traditionally rise starting from the second week of August. With the current production not being suited for stack-ups and the heatwave in the Netherlands, Belgium and Germany coming to an end as well, relief might be near.