As the 2025 agricultural season concludes in California, attention is shifting to the prospects for 2026. The National Oceanic and Atmospheric Administration (NOAA) has reported that La Niña conditions are present and are expected to persist through February 2026. There is a 55% probability of a transition to ENSO-neutral conditions between January and March 2026. Historically, La Niña events, which are marked by cooler sea surface temperatures in the central and eastern Pacific Ocean, increase the risk of drier weather across much of California. While not every La Niña leads to drought, there is an increased chance of below-average precipitation.
Despite these concerns, the current water year began positively with early October rains bringing measurable precipitation to key growing regions. However, this rainfall also disrupted some late-season harvests such as processing tomatoes. After three years of strong rainfall and snowpack accumulation, most major reservoirs in California remain above historical averages. This provides some security heading into the new year but does not guarantee sufficient surface-water allocations for growers next spring. Allocation decisions will depend on how winter progresses. Morning Star continues to monitor water outlooks closely as well as legislative or regulatory changes that could affect important growing areas.
Economically, California agriculture shows mixed trends. Row-crop producers face high input costs and weak commodity prices while cattle and dairy sectors have seen improved margins due to stronger markets. Permanent crops like almonds have largely recovered after difficult years; however, wine-grape producers continue to struggle because of low consumer demand. These factors are changing crop choices across the state as less profitable acreage leaves production.
The 2025 processing tomato crop stands out as one of the most productive ever recorded in California. Favorable weather led to record-high yields statewide—over ten percent higher than pre-harvest estimates—with efficient harvest conditions contributing further success. In many locations, delivery rates exceeded plant capacity causing logistical challenges for processors who worked to maintain quality standards amid heavy volume intake. Fruit color and consistency were notably good thanks to steady maturation and limited disease during ripening.
Looking forward to 2026, caution prevails among growers and processors alike. Demand from processors has weakened; following two consecutive reductions in planted acreage, another decline is expected next year—marking a third straight year of contraction for processing tomatoes. Field prices are under pressure due to high inventories but with favorable water supplies and a record-setting crop behind them, growers approach the new season with cautious optimism focused on restoring supply-demand balance.
The resilience of California’s agricultural sector remains clear as it faces ongoing uncertainty around water availability, market changes, and evolving production economics. Collaboration across all parts of the value chain will be essential for navigating challenges in 2026 while maintaining California’s leadership role in global agriculture.
“As a reminder, Morning Star is now distributing our newsletters electronically using an email distribution vendor called Mailchimp,” said representatives from Morning Star Company.”Your e-version will now include informative Morning Star videos and highlights. Depending on your company’s firewall, these emails may initially be directed to your spam folder.”
