So, at target, Tomato Sauce is $0.84 / lb. But, tomato paste is $1.00 / lb. However, tomato paste has 4x as many calories, implying that they reduced it by 4x. This makes sense, since reducing tomato sauce to tomato paste in a pot generally reduces it by 4x. But, why is it not 4x as expensive? How is it only barely more expensive if it requires so many more tomatoes to create? Generally speaking even boiling for longer costs money. Milk powder is almost always more expensive than milk, for example (In all of the grocery stores that I've checked, at least). I can't find tomatoes for less than $1 / lb, which upsets me because I want to homemade tomato sauce and tomato paste but it's just not cost effective. Where are they getting practically free tomatoes?
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I'm voting to close this question as off-topic because it is about economics, not about techniques of food preparation – rumtscho May 13 '19 at 06:28
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2I know the question is popular, but we have had a longstanding policy of not answering price questions. If you want to know why a commercial manufacturer can produce something cheaper than a person can do at home, that's a basic fact of economics that holds regardless of the item being a food, and does not fall under the site scope as defined in the help center. – rumtscho May 13 '19 at 06:31
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@NicholasPipitone It seems to me like the on topic question, and the question the you seem to actually want an answer to, is the last one- how can you make homemade tomato paste more affordable than commercial. I mention this as a direction for an edit to reopen if you are so inclined. (Of course it would make my answer obsolete.) – Sobachatina May 13 '19 at 23:44
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What you are observing is that the bulk of the price of tomato products is not the tomatoes.
The price of the can and shipping far outweigh the few cents of tomatoes the can contains.
With fresh tomatoes you are still mostly not paying for tomatoes. You are paying for the gas and people to ship and stock your tomato and all the other tomatoes that were shipped with yours and thrown away damaged or unsold.
Sobachatina
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4+1. I feel that this answer can be improved with an example using actual numbers, but finding actual numbers may be a significant research effort. [This (US-specific) dataset comparing average retail and at-farm costs of fruits and vegetables](https://www.ers.usda.gov/data-products/price-spreads-from-farm-to-consumer/) might be an OK starting point (Offering average tomato prices at the farm), but I was not able to find an analogous source that directly compares the spread between the price paid for raw tomatoes at a farm and retail canned tomatoes. – user95442 May 13 '19 at 01:28
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@user95442 that would be interesting to see. It would be difficult to find a price to compare. For example, Hunt's grows their own tomatoes. You'd have to know their farming costs rather than having a wholesale purchase price to compare. – Sobachatina May 13 '19 at 02:16
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1@user95442 What an awesome link. But, from your link it looks like the farmer still gets $0.40/lb, giving the inaccurate $1.60/lb for tomato paste before considering shipping and packing if it's a 4x reduction. Though, for retail it says $2/lb, which must be some type of average because finding tomatoes for $1.00-$1.20/lb isn't that hard. There's still something missing here. 1 lb Tomato Paste is $0.16 more expensive than 1 lb tomato sauce, but includes 3 more lbs of tomato than tomato sauce. That gives a cost of $0.16 / 3 = $0.056 / lb of tomato. There's still something that's not understood. – Nicholas Pipitone May 13 '19 at 03:22
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1@Sobachatina Wholesale prices are usually pretty close to the mark - unless you just like to do vertical integration for the hell of it, you're going to compare your production to wholesale anyway - if you were so good at raising tomatoes that you could make a profit on selling them directly, you would be selling them directly; if you're making a loss compared to wholesale, you're better off buying. Of course, assuming you'd get comparable quality etc. - but that will usually skew the results towards "more expensive than wholesale". – Luaan May 13 '19 at 06:33
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2@NicholasPipitone Keep in mind that prices of produce fluctuate throughout the year; average prices aren't a good measure for industries like canneries. Still, the discrepancy looks too large to account for that. Of course, in the end, the cost of production has little effect on the price - the price is what people are willing to pay, mitigated only by the willingness for others to join the market (including all the necessary investments etc.). Especially in the US context, food is just ridiculously cheap. You're not really going to increase your profits through lower prices. – Luaan May 13 '19 at 06:50
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It's cheap because it is easy and cheap to make/produce.
They don't need to have perfect tomatoes to make tomato paste, compared to making canned tomatoes or tomato sauce. (IMO)
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4Fresh produce also turns bad and has to be thrown out quickly if it isnt sold, which is factored into the price. No such issue with canned stuff. – ElectronicToothpick May 12 '19 at 18:42
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Why does tomato sauce need perfect tomatoes? I understand canned being cheaper than fresh, but I can pay $0.12/lb more. But tomato paste is 5x more expensive for me to make using fresh tomatoes than buying tomato paste, which is crazy. Tomato sauce seems like it should be precisely 3-4x cheaper than the paste – Nicholas Pipitone May 12 '19 at 21:27
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2You also can factor in the cost of packaging (small cans vs large ones) and the cost of transport. The tomatoes themselves probably cost very little. I wouldn't be surprised if the packaging cost as much as the actual tomatoes. – May 12 '19 at 21:40
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2@NicholasPipitone Actually, where I'm from, substandard tomatoes (and other veggies and fruits) can often be gotten for free from farmers (if you come pick them yourself). People only want to buy A-grade in supermarkets, so disfigured or discolored produce is usually just left to rot in the field (or compost), or sold for processing at significant discount. Canned paste can use these with no issues whatsoever, so that's another reason why just taking average tomato prices isn't giving you the correct picture. – Luaan May 13 '19 at 06:55
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one run at Google shows a more complex process to make tomato sauce. https://image.slidesharecdn.com/rhidimaandvasudha-150515065227-lva1-app6892/95/tomato-processing-7-638.jpg?cb=1514799842
but i guess this answer would depend on recipe for said product. So the real question should be 'Why is tomato sauce not 1/4th the price of tomato paste?'. The answer should be 'There is increased cost due to other ingredients added to the tomato sauce in processing.'
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This must be referring to something else. I'm just talking about tomato sauce where the only ingredient is tomatoes. Even seasoned tomato sauce shouldn't have sugar in it. That looks like the process for ketchup, since it says "1/3 sugar" and addition of vinegar, both of which are important ingredients in ketchup but aren't found in even seasoned tomato sauce (Which would just have salt, garlic, and herbs in it). – Nicholas Pipitone May 13 '19 at 05:51
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1Hm, there is an interesting point though. The ketchup slideshow shows the process from raw tomato to pulp/juice. The flowchart then only mentions using pulp for the ketchup but never mentions using the juice at all. Meanwhile the tomato paste only calls for the juice. So it looks like they start with fresh tomatoes, and then strain it into juice and pulp. Juice goes into puree or paste, while pulp goes into ketchup. But, tomato sauce / tomato puree also just uses tomato juice (The seeds and skin are always strained out), so while this information is interesting, it doesn't solve the mystery – Nicholas Pipitone May 13 '19 at 05:54