May 12, 2022
When it comes to grapes grown for raisins, Harry Overly is recognized as spokesman for the industry as his 750 family growers tend to some 50,000 acres on behalf of the industry giant, Sun Maid.
His take for Crop Year ‘21 and his Look-Ahead to Crop Year ‘22? “Crop production is volatile,” he admits as he prepares to address his board members and other company executives this month. “Trying to correlate past experience and ‘best estimates’ doesn’t always work. One of my managers used to recommend taking all the data and reducing it by 30% as a more accurate ‘guesstimation’.
“The challenge we’ve had over the last four years is that crop production has been so up-and-down. This past year was the first in my seven-year tenure here that the wine industry got involved in the green grape market and spun off a crush of nearly 140,000 tons, which deeply impacted raisin production.”
Because of continuing drought and wildfires, there were few white varieties available on the spot market, so wineries went searching for other alternatives, specifically Thompson Seedless, which normally becomes raisins. And it’s possible that pattern may repeat itself this year.
Still, said Overly, “The optimist in me feels we can expect a rebound in grape production this year, dependent on the number of acres being pulled out. The industry is relatively in balance right now between supply and demand and if we can keep that balance, it gives us an ability to keep holding our pricing. And all of this hinges on it actually raining once or twice and not running into 115 degree weather. There’s no such thing as a ‘normal’ year.”
Pricing remains among the questions yet to be answered. “The price isn’t where growers want to see it even though Sun Maid growers have been paid, on average, 25-35% more than the rest of the industry over the past couple years and have been able to weather through inventory and oversupply situations better than most. But we’re all sharing the pricing pain.”
Pricing is further impacted by some foreign producers who compete by selling 30 or 40 percent lower than U.S. product.
“It’s a hard thing to do, to raise prices and still sell more, and we’ve been successful in doing so, but I’m cautioning growers that between Crop 21 and Crop 22, I expect a relatively stagnant movement on pricing as food companies in general catch up with inflation.”
Citing all the traditional problems from lack of labor to lack of water, et al, Overly said: “We tend to be pretty insulated versus the rest of the industry when it comes to roguing vineyards, although we have had some growers pull out to reinvest and diversity into other crops. What we’re seeing is some of the smaller traditional vineyards coming out because they can’t compete from a cost-price perspective. Plus, some of these folks who own vineyards are multi-generational families that have decided to retire and are selling off the land and moving on.”
Asked if there was any new news about recently-introduced varieties such as Golden Seedless and Fiesta and their acceptance, he said: “We put some flavored raisins into play to compete with the fruit snack sector and that product line continues to build even though it came to a screeching halt in the midst of COVID, but our focus is still on the all-natural snack. During the pandemic, people cleared the shelves of the recognizable and comfortable red boxes and we added lots of new users too.”
So, despite the volatility, Overly has some stay-the-curse advice for those who plant and process raisin grapes. “We’re going to be faced with continued inflationary costs, so modernizing harvesting equipment and techniques becomes even more important to drive down grower per-pound costs and increase their per-acre output.”
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