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Opening Thompson seedless grape offer of $250 highest ever

Opening Thompson seedless grape offer of $250 highest ever
Record Thompson seedless green prices offered to growers. Green price offers growers best alternatives in decades. Late crop could swing growers to green versus more risky raisins.  

The opening winery offer of a minimum of $250 per ton for this year’s green Thompson seedless grapes for crushing represents the highest price ever paid for the multi-use grape that has for decades been the foundation of the San Joaquin Valley grape industry.

Nat DiBuduo, president of the Allied Grape Growers, the state’s largest wine marketing cooperative, said an initial $250 offer ($240 plus $10 hauling allowance) has come from Constellation Wines, the third largest wine company in the U.S., behind The Wine Group and Gallo.

Other, smaller wineries have also committed to paying $250 per ton.

DiBuduo expects other wineries which also buy Thompsons will follow suit.

Thompson seedless grapes are crushed green for use in concentrate, dry white wine, brandy and champagne. Last year’s Thompson crush totaled more than 268,000 tons, seventh on the list of leading crush varieties. Thompsons accounted for 6 percent of last year’s total crush. Last year’s average price for green Thompsons was $218 per ton.

The majority of the Thompson seedless acreage is dried into raisins.

The difference between the 2009 final price and 2010 offer represents an additional $320 per acre in income on a 10-ton per acre Thompson vineyard crop. The $250 green price is almost $1,000 per acre more than wineries paid for 2006 and 2007 green Thompsons.

DiBuduo said Allied is weighing the initial 2011 offers.

The enticing price offer represents strong demand for green Thompsons in a year where raisin growers are expected to get $1,500 per ton for raisins, for the second year in a row.

DiBuduo and Glen Goto, president of the Raisin Bargaining Association, said the record green price offers Thompson growers profit-making alternatives like they have not seen in decades.

It could not come at a better time, since this crop is very late and being challenged by heavy powdery mildew pressure, which can affect grape and raisin quality, and ripening.

Go green or make raisins

“The $250 price is going to have a big impact on grower decisions to go green or make raisins,” said Goto.

Last season is fresh on growers' minds. Like this season, that crop was late and the majority of it was picked at the end of September. Historically, the majority of the valley’s raisins are picked to field dry by late August.

“The season was so late there were a lot of acres to pick at one time, and growers were concerned about whether there would be enough labor to get raisins down in time to meet the field dried Sept. 20 insurance deadline,” said Goto. The crop insurance deadline for machine-harvested raisins is Sept. 25.

Raisins growers escaped disaster last year, but they know they may not be so lucky in a second straight late year.

Goto said raisin sales are off a bit because of the high price related to tight supplies last year. However, Goto said “shipments are about where we anticipated. It should be a good sales year. Coming off a record year, we expected sales to be down a bit.” Goto admitted, however, that meeting sales demand could still be problematic if too many growers elect to harvest for wineries.

“A significant portion of Thompson growers will put a pencil to their individual operation and decide which is best for them,” Goto said. There are far less risks to harvesting green.

The Thompson crop based in RBA’s bunch count is “less than one bunch larger than last year. It is an average crop based on the 10-year average.”

DiBuduo said Allied is “not trying to rob the raisin industry. We are trying to solidify those guys who traditionally go green.”

The raisins versus green decision will be tempered by the fact that the crop is up to two weeks late because of the cool, wet spring, said DiBuduo.

“The crop looks pretty good. However, growers are battling powdery mildew hard. It is popping up all over the place and growers are keeping rigs running to try to head it off,” said DiBuduo.

Heavy powdery mildew pressure can slow down crop maturity, pushing the crop even farther behind.

The Thompson price is another sign that the overall wine grape market is getting stronger this year. “I had more activity in March than I had last year for all varieties and all areas,” DiBuduo said.

While this may be shaping up as one of the best years ever for Thompson seedless growers, it has been a costly journey. Over the last decade more than 100,000 acres of vines have been removed in the San Joaquin Valley due to low grape prices and yearly market uncertainty. Most of those vineyards were Thompson seedless, replaced by more profitable and stable crops like almonds and pistachios.

There are about 3,000 raisin growers in the Central Valley, centered around Fresno, Calif., and 185,000 acres of Thompson seedless vineyards in the state. There were more than 260,000 acres of Thompsons in the ground through the 1990s before the removals began. California’s bearing vineyard acreage totals 738,000.

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