Processed tomato sector finds 2026 balance as inventories stabilize

The global processing tomato market is entering a more balanced phase, according to a new outlook report from Rabobank. Rebuilding inventories and slower demand growth are expected to keep prices flat or slightly lower through the 2026/27 season.

The assessment said limited supply growth across major producing regions, including China, Southern Europe, and California, continues to shape market conditions. And while inventories have recovered from historic 2023 lows, acreage constraints in the Golden State and other key origins could tighten supplies again as the market approaches 2027.

Rabobank expects China to maintain production near 2025 levels, as weaker European exports prompted the Asian Giant to scale back output amid heightened scrutiny of labor practices, traceability, and origin labeling.

Southern Europe, particularly Italy, continues to focus on premium tomato products rather than volume expansion. Rabobank said the Mediterranean country remains a benchmark supplier of high-value tomato derivatives, while Spain and Portugal maintain a more cost-competitive export model.

California acreage remains tight

Rabobank said California processors and growers have moved beyond the severe inventory shortage that drove prices sharply higher in 2023.

As of March 1, 2023, US processing tomato inventories fell to just over 5.8 million short tons, the lowest they’ve been in over 20 years. Since then, levels have increased steadily following several strong production seasons.

Many industry participants expected acreage reductions to sharply curb production in 2025. However, favorable growing conditions and strong yields offset much of the decline in planted area.

California acreage fell to about 200,000 acres in 2025, reaching some of the lowest levels in decades. However, near-record yields allowed processors to maintain production and accelerate the rebuilding of inventory.

Looking ahead, Rabobank expects California production to decline in 2026 as acreage remains constrained and yields are unlikely to match 2025 performance. The bank said total production could fall below 11 million short tons, making it one of the smaller crops in recent decades.

Regarding prices, market dynamics have shifted as inventory has recovered. Grower prices reached approximately $138 per short ton during the 2023 supply squeeze, and as inventories began rebuilding in 2024, prices have moderated and entered what Rabobank described as a normalization phase.

Trends reshape demand

On the demand side, Rabobank said that changing consumer behavior and the growing use of GLP-1’s are influencing purchasing patterns.

Consumers increasingly favor nutrient-dense foods, cleaner labels, and smaller portions, the document noted.

Against this backdrop, several tomato-based categories have recorded year-on-year volume declines since the third quarter of 2025, including pasta sauces, pizza sauces, ketchup, and salsa.

However, premium products continue to outperform conventional offerings.

Organic private-label ketchup posted double-digit growth while conventional private-label ketchup declined. In pasta and pizza sauces, category dollar sales increased slightly despite lower overall volumes.

*All graphs by Rabobank.

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