Thompson green price reaches $325 per ton for short cropThompson green price reaches $325 per ton for short crop
2012 crush begins with smaller Thompson seedless crop.Wine-variety grape crops larger than 2011, but average size.No more than 20 percent of grape crop unsold on eve of California harvest.Excessive heat and a short labor supply could cause harvest problems.
August 14, 2012
California’s grape crush is under way with an aura of optimism that transcends the past two seasons and could end up as one of the best years in a decade.
Any doubts that this could be the season to remember are disappearing with the brisk bidding for green Thompson seedless grapes as the statewide crush begins.
Before harvest, the opening price for Thompsons was $300 per ton, $35 more per ton than last season. Several wineries kicked that up to $310 as harvest started, and during the weekend of Aug. 10-11 one winery bumped it to $325, more than 22 percent over last year’s price.
It’s all about supply and demand. The Thompson crop is off at least 25 percent from last year, according to Nat DiBuduo, president of Allied Growers.
This is turning into another season of brisk bidding for Thompsons from wineries and raisin packers. No field price has been set for raisins, but already a $2,000 per ton price is being bantered around. That is $300 more than packers paid last year. Last season, as wineries increased the price for Thompsons during the crush, raisin packers sweetened their bid for raisins by $200 from the pre-harvest negotiated price of $1,500 per ton to maintain their supply of raisins.
The $65 per ton over the $265 2011 would give growers an additional $650 per acre in income and bump the income from a 10-ton Thompson crop to more than $3,200 per acre.
Unlike the Thompson crop, wine-type grape production is expected to be up this season. Wine-type variety grape production for California is forecast at 3.7 million tons by NASS, up 9 percent from the 2011 crop.
The wine grape crop estimate “is not too far off,” according to DiBuduo.
“I’d call the wine grape crop a good average wine grape crop,” he says, adding, “If we have 3.7 million tons of wine grapes, crush 300,000 tons of raisin type grapes and crush 100,000 tons of table grape strippings, we can hit a 4.1-million-ton crush in 2012.”
That would make it the second largest crush in history behind the 4.3 million tons crushed in 2005. That crush hung over the market for several years, forcing prices down. However, 2012 is a different scenario with growing wine sales and strong winery demand for growers’ grapes.
DiBuduo estimates no more than the 20 percent of the crop from 850,000 acres of grapes remain unsold. That’s not because of a lack of demand. Growers are holding out for more money.
“There are pockets of grapes still uncommitted. I would say 15 percent of the North Coast grapes are still available and a few grapes are still available in the Lodi area,” he said. Sold-out signs hang on the farm gates of most Central Valley vineyards.
DiBuduo, president of Allied Grape Growers, the state’s largest wine grape marketing cooperative with 600 growers selling to more than 100 wineries, says grower prices are 25 percent to 40 percent higher than last year, depending on the variety.
Allied is expected to top $100 million in sales this season.
Light crop gets lighter
The harvest season starts in earnest with the central San Joaquin Valley’s Thompson seedless crop, the largest variety in the state.
Crews began harvesting green Thompsons the first weekend in August.
According to NASS the raisin-type variety grape forecast is 1.9 million tons, down 13.4 percent from the 2011 final production. NASS’ objective measurement survey, counted an average of 29.1 bunches per vine for a bearing acreage of 205,000 acres. By comparison, there are 95,000 acres of Chardonnay and 80,000 acres of Cabernet Sauvignon in the state.
The NASS bunch count is below the counts for the Raisin Bargaining Association (31 bunches per vine) and Sun Maid Growers (32 bunches), but above the Allied count (26 bunches).
It’s too early to determine who won the bunch count lottery, but an old axiom is surfacing with early harvest weight tags.
“It’s the old story; a projected light crop gets lighter,” said DiBuduo. “It’s too early to make a broad statement about crop size, but initial loads are showing fields lighter than have been estimated.”
DuBuduo believes NASS is off 25 percent on its Thompson crop estimate.
Last year’s Thompson crop was one of the biggest green crops in history at 11.25 tons per acre. This season’s crop was estimated pre-harvest down 18 percent to 9.25 tons.
DiBuduo estimates only 10 percent to 20 percent of this season’s crop remains unsold from the state’s 850,000 acres of grapes.
(For more, see: Wine grape crop poised for record sales)
That is a far cry from crops earlier in the decade, when prices were below the cost of production and grapes were left hanging unsold on the vine. Some growers opted to custom crush to see if they could profitably sell their crops as bulk wine.
The $325 green Thompson price Allied is reporting is a piece of the economic puzzle now in place for growers who must decide soon whether they will go to the winery or make raisins with their Thompsons and other raisin-type grapes.
Thompson acreage has fallen dramatically in the past decade as other crops offered higher returns. Almost 100,000 acres of Thompsons have been taken out over the past decade and acreage is still falling at the rate of 2 percent to 4 percent per year. 5,000 acres were reported taken out this year, despite record green and dry prices. This has tightened the raisin supply to a very thin line separating supply and demand.
It is much more expensive to plant a vineyard than an orchard. Not counting land costs, a grower can easily spend $10,000 per acre or more to establish a trellised vineyard versus $6,000 to $7,000 for an almond orchard.
Raisin Bargaining Association Chief Executive Officer Glen Goto said no field price has been set, and negotiations with packers are continuing. The raisin harvest should begin in earnest by the end of August, although zante currants will be harvested earlier and growers are now cutting canes for DOV harvest in some early varieties like Selma Pete.
The $325 Thompson price puts pressure on the packers to raise the price significantly higher than last year’s $1,700 per ton.
Not all Thompson growers have the options of green or dry, since many vineyards are old and will not tolerate mechanical harvesting.
Hand-harvesting is expensive and there is a looming labor shortage. It takes 40 to 45 people per acre to hand-harvest green grapes for drying into raisins on paper trays.
“We have been talking to the tree fruit people, and they are saying they have to make do with fewer people,” said Goto.
(For more, see: Labor shortage looms over wine grape harvest)
It takes 20,000 to 30,000 people to hand harvest the Central San Joaquin Valley green crop for raisins. “We are talking to labor contractors, and they are saying they anticipate having the workforce to harvest and roll the crop.” How quickly that can be done is another question.
It once required up to 50,000 workers during a six-week period to harvest the valley’s raisin crop. This has been reduced with 30 percent to 40 percent of the valley’s raisins now mechanically harvested. Even then, it takes about 20 people per acre to do all the field work associated with mechanical harvest like cutting canes ahead of the grape harvesters and picking up the dried raisins.
The labor shortage is not unexpected. There have been reports of labor shortages in cherries, strawberries and vegetables all year long, says DiBuduo. “This could be a major factor in a grower’s decision to go to the winery or make raisins.”
DiBuduo says 95 percent of the valley’s wine grapes are machine harvested, but still contract harvesters are having difficulty hiring skilled laborers to operate the harvesters and other equipment used for mechanical harvesting.
Weather could play a significant role in the final wine and raisin tonnage. As fall approaches, growers typically worry about rain and cold weather. This year, it is excessive heat.
It was hot around the July 4 holiday weekend, when temps reached 108 F and above in the valley. It slowed down sugaring, but did not sunburn fruit, says DiBuduo.
By mid-August, however, another heat wave hit and temperatures soared to 111 F on Saturday, Aug. 11 in Fresno. The weather forecast called for temperatures to hold at 100 degrees or above for at least a week. “We could see damage from this heat,” he says.
Although raisin harvest is still a couple of weeks away, excessive heat and a short labor supply could cause problems there, according to Goto. A prolonged heat wave could dry the grapes into raisins quickly and if not turned and rolled quickly, there could be damage.
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