Tomato growers really feeling the squeeze

Tomatoes NZ chair Barry O'Neil says some growers are not replanting full areas of their glasshouses because they do not have enough labour.

"My board has been concerned for some time we keep getting push back - from consumers, the media, from policy makers, from government - that the price of tomatoes is so high that growers must be creaming it," he told Hort News.

For instance, tomatoes might have been priced at $14/kg for loose tomatoes in the supermarket over winter."Little do the people realise that the cost of producing tomatoes is such that a number of growers have stopped growing," he says. "Over the last four years, 25% of our smaller growers have left tomato growing either to grow cucumbers or leave all together."

O'Neil believes covered cropping is the future in terms of resilience to climate change and managing inputs and outputs. However, he says that policy settings need to be right to allow this to be viable.

Tomatoes NZ has released a discussion document outlining some of the major issues facing the industry.

"We have raised the issues of food security in the document. In New Zealand we may think we don't have a problem with food security because we export so much food," he told Hort News. "But the reality is, with fresh tomatoes - it's becoming more difficult to grow and succeed as a business. If we are not careful we will end up importing frozen vegetables and tomatoes from countries that don't have the same restrictions."

O'Neil says a new glasshouse might cost about $3 million/ha to set up and get operating and a huge investment is required.

"The number one issue is labour. It is not a wage thing, how much we are paying, the labour is just not available."

He says tomatoes are nearly a full 12-month crop but a number of growers are not replanting the full area of their glasshouses because they don't have any certainty of labour.

"We recognise everyone is in the same boat, it is not just the tomato industry suffering from labour shortages. But surely, as a country, we can be more open minded and work more proactively to get the right labour settings with migrant labour, especially those which will support our industries to succeed rather than to shut down.”

O’Neil says another concern for the sector is energy. “Energy costs have increased by more than 50% over the last 12 months. Energy is already in the ETS scheme, so with the heating of glasshouses we are already impacted by the ETS,” O’Neil explains. “Whereas other countries producing tomatoes internationally are not. We have a disconnect, with respect to some of the costs and policy settings we have in New Zealand, compared to our competitors.

He says the industry is committed to becoming carbon neutral.

“But we can’t do it on our own, so a transition to a future that will be economically viable as well as sustainable is really critical.”

O’Neil adds that biosecurity has also been a huge problem for the sector.

“We have spent hundreds of millions of dollars over the last few years in responding to biosecurity events that weren’t of our direct making,” he explains. “But as an industry we are dependent on imported seeds and so we get, with those seeds, problems coming in, which as an industry we are forced to pick up the cost and respond to.”

Hot Air Costly

The heating energy dynamic is particularly important for tomato growing.

O’Neil says heating costs for glasshouse tomatoes is the second highest cost for production after labour.

“For our business the cost of heating doubling will have a real impact.”

He believes that a very real scenario for New Zealand is that tomatoes will be produced outside of NZ if we can’t address some of these policy issues and get the industry viable.

O’Neil explains that ETS industrial offsets are meant to support growers – so they are not disadvantaged by imported Australian tomatoes. Those industrial offsets are down to 60% (they were at 95%) and are reducing every year.

“With every auction of carbon units growers are being more and more exposed to the true cost of carbon.”

He’s heard one grower say the cost was about $50,000 per hectare.

“They can’t grow at that sort of level.”

O’Neil says the sector is trying to work with government and get more dialogue on how to transition to renewables.

“There are two issues. There is a transition needing financing to move to renewables – how can the government support the sector in that, and the second one is the certainty of the supply of renewable heat fuel, if that is wood biomass or whatever. There needs to be certainty in the market,” he adds.

“If I am a tomato grower, I am not going to spend $12 million changing my boiler to a wood biomass, to then find I can’t use it every day because I can’t access enough wood biomass. That is just an example.”

O’Neil says the industry needs policies that will help and support transitioning to viable covered cropping for the future.