America is running short on tomatoes

Tomato, to-mah-to – whatever you want to call it, there may not be a lot mo'. According to the Department of Agriculture, production has dropped significantly compared to the beginning of this year.

🍅📉 Driving the trend… The largest factor? Farmers are struggling to get enough water. Roughly 95% of the nation's processed tomato production – and about 35% of global production – comes from California… and per a study published in Nature earlier this year, 2000-2021 was southwestern North America’s driest 22-year period since the year 800.

More than 40% of the state is currently classified as being under an extreme drought, with one farmer telling Fox Business he’s lost nearly 15% of his processing tomato crop land over the past few years due to lack of rainfall.

But the issues go deeper than just a water shortage.

• From 2015 to 2019, countries were cutting imports of American tomato products because of their relatively higher prices. This created an oversupply, causing US farmers to cut down on the number of tomatoes they planted.
• Inflation has also driven up input costs, which aren’t being outpaced by prices – leading many farmers to switch to more profitable crops. Last year, the California Tomato Growers Association negotiated a 5.6% higher price than the previous season on behalf of tomato growers, but processing tomatoes was 7% more expensive, according to the Washington Post.

👀 Looking ahead… Kraft Heinz said this week that it’s sourcing tomatoes from other areas outside of California and could guarantee all its products will be in grocery stores, but didn’t rule out price increases. Which are an almost certainty, considering – say it with us now – when in short supply, prices go high, high, high.

And it’s not just tomatoes, either. 2023 negotiated prices for onions and garlic reportedly include another 25% year-over-year increase.

+Elsewhere: Inside the looming butter shortage.