Richard Ha writes:
I haven’t mentioned this yet, but we have been phasing out production of our tomatoes.
This came about because of what I’ve been saying here for years: The price of oil has raised farming costs substantially. The pluses of growing our hydroponic tomatoes were no longer exceeding the minuses.
When we started growing tomatoes back in 2002, we had been banana growers. Oil prices were low and banana prices were also low; it was hard to make a living that way. We needed to diversify, which is one of the reasons we went into tomatoes. It was a good decision.
But costs have been increasing drastically, and our tomato growing infrastructure is getting old and will start falling apart soon, so we had to make a decision. Do we take it apart and rebuild the tomato houses? Or do we replace them? Replacing them would cost an eye-opening three times what it cost 12 years ago when we put them up.
It’s a real-life consequence of what I keep saying here: The price of oil is four times higher than it was 10 years ago and there are significant consequences. Everything costs so much more now. We are in the middle of major changes and most people don’t even realize it.
We took into account that our customers are under increasing economic pressure, as well—meaning they have less disposable income—and that our tomatoes are a high-end product. We also knew, as we made this decision, that oil and other costs are expected to keep rising.
Our plan had always been to take our tomato farming to the next step, which would have been to leverage our excess hydroelectricity in a controlled environment that allowed us to exclude insects and optimize light and temperature. Unfortunately, it just took too long to get our hydro plant operating.
It’s been a very difficult decision, and one that we’ve been carefully considering and making for quite some time, taking not only all these conditions into account but also our next generation. As hard as it’s been to make this decision, we all agreed it was the right thing to do. It allows us to continue farming.
We’re definitely not closing up shop; just refocusing our farming efforts based on economic factors.
We will stay in bananas. They do well in our rain and deep soil and other conditions. The banana infrastructure we have in place, such as the coolers and concrete, is good for another 20 years. The pluses exceed the minuses.
I continue to be very interested in producing a cost-effective protein source here on the farm, such as tilapia and other fish. We are currently working on the problems of protein feed and oxygenation of water, which we can do with gravity and electricity. We’re always thinking about where we need to be in 10 or 20 years.
And I’ll let you know what other interesting projects crop up along the way.
In the meantime, you’ll see our Hamakua Springs Country Farms tomatoes until the end of November; that’s when the last of them will come off the vines, go through our packing houses, and hit the supermarkets.
We thank you for supporting, and enjoying, our tomatoes all these years.
You forgot the cost of packaging. I like Hamakua tomatoes but usually only need two at a time. The Hamakua is 4 smaller tomatoes in a good preservation package but they tended to be too firm and it was kind of curious how they stayed so firm for so long.
The big point of having to make this decision is that Hawaii island cost to provide local produce ends up being more than the same imported produce gone through multiple handlings and traveled thousands of miles. Something major wrong there. Hawaii island could easily produce almost all of its own domestic needs and export to the outer islands. There are massive obstructions to this ever happening, and the trend is to import more and more, despite all the talk story about local farming.
What a disappointment. Hamakua Springs is a select brand we seek out when shopping. You’ve given up, and you won’t address the underlying issues that led you to this decision. Yes, we get it, you don’t like oil. However, the price of oil is an excuse you have used without addressing the primarily problem why oil is costly.
I am truly sorry to hear this.
Kini. The existing structures had an expected life of about ten years. They are now 12 years old. Not counting the cost to clear the land, the structures themselves now cost three times what they did back in 2002. The operational costs such as medical, workers comp are now much more expensive than it was back in 2002. The only way we could start from scratch now with today’s costs would be to raise the production or lower the cost associated with growing the crop. We could not do either. I do not dislike oil. After all, a 100 hp tractor is the equivalent of 1,000 humans with pick and shovels. Oil is hard to beat. What I constantly point out is that oil price quadrupled in the last ten years. And those who could pass on the price hike did so. The rubbah slippah folks are not as fortunate and neither are farmers, who are price takers and not price makers. So, we had to adapt or go extinct. We gave it a lot of thought over the last five years. Kini, there is an opportunity there for an enterprising person. It’s just not us.
I am wondering if you had difficulties with the permitting or regulatory side of your hydro? Thank you
My grand daughter will only eat your tomatoes! Really!
If it’s not Hamakua, it’s not tomatoes!!!
Aloha Ted
I was just talking to an organic grower from Waimea and he said the costs associated with hiring people was just so hard for his small operation to deal with. The new Food Safety Modernization Act will add more costs to small farmers.
Aloha Orion. You asked if we had problems on the permitting or the regulatory side of the hydro. It was delayed because of unforeseen things. Some our fault some theirs. But, mainly understandable. I wish we could have done net metering, that way when the river is running strongly we could feed electricity into the grid. That is a good thing because when the river is running strongly, it is generally overcast so solar PV is less. Right now we have to dump the excess electricity.
Mahalo Lynn, Sonia and Carol! We appreciate your kind words.
Howzit Richard, the main reason for import produce being competitively or lower priced than locally grown produce is due to wage and benefit disparities. Farming is still very labor intensive, in Hawaii, the minimum wage is $10 per hour with some benefits, usually vacation time. This is in competition with areas that pay $1 per *day* with no benefits. Even with the high price of oil for tankers and jets, this 1/80th cost for labor more than makes up for transportation and handling while still extracting a good profit. The mainland suppliers are also still able to undercut local farmers with this farm labor cost advantage.
The price of oil is falling a lot but this is predicted by peak oil, the 5 to 10 year span where the supply of oil exceeds the demand. Over these years, the demand for oil increases arithmetically while supply increases at a faster rate until peak production is reached. From there, production produces less and less oil because the supply is running out. It will seem like boom times for some areas, unfortunately not for small farmers.