September 17, 2013
Large crops often create more problems than small ones, and this season’s California raisin-type grape crop is huge compared to last season.
This is resulting in confusion and indecision for Central San Joaquin Valley raisin and grape growers.
“We are averaging 11 tons per acre on Thompsons. Last year the average was 8,” reports Nat DiBuduo, president of Allied Grape Growers, the state’s largest grape growing marketing cooperative.
This has generated offerings ranging from $235 per ton to $300 per ton for green Thompsons. Gallo came out late at $250. Last year the average price was $325. DiBuduo expects the final price to average $250 since Gallo takes more Thompsons than any other winery. However, some growers are delivering their part of the big crop to wineries without a firm price.
“That is not the way to market a crop. Wineries are getting all the Thompsons they need,” he said.
Other growers made 11th-hour decisions to make raisins with the lower winery price. There was even a report of a crossarm trellised Thompson vineyard that was laid the week of Sept. 9 for raisins. Virtually all Thompson vineyards do not have crossarms to facilitate in row drying. The grower who saw the crossarmed vineyard doubted the raisins would dry naturally. However, the grapes must be picked by Sept. 20, the deadline to collect raisin crop insurance.
“Isn’t that fraud,” said the grower.
The large crop is creating a dilemma in the Raisin Bargaining Association’s efforts in negotiating a field price for raisins.
Glen Goto, RBA chief executive officer, said the RBA have offered packers a sliding scale of prices rather than a single price to start formal negotiations. Packers have a couple of weeks to evaluate the offer.
“We are still in a quandary about how big this raisin crop really is, and we may not know until next July,” he said. “But we need to start somewhere to get prices established.” Thus the sliding scale.
Packers are saying the crop is big and prices should be lowered from last year, and the RBA does not agree because it sees added sales opportunities ahead and growers are paying more to bring in this large crop.
The RBA sliding package calls for a price of $1,700 per ton if the crop comes in at more than 350,001 tons and $2,000 if it is less than 300,000 tons. Prices in between those two extremes are $1,900 for deliveries up to 325,000 tons and $1,800 per ton up to 350,000 tons.
“The industry produced 311,000 last year and sold every pound of it, so we feel we should be at least approximately the same price as last year if the crop is less than 300,000 tons of raisins,” he said.
Huge opportunity for raisin sales
Growers received $1,900 per ton last season.
“We also recognize we are picking more trays this year than last year, but we also could get 2 inches of rain in October and that would wipe out a lot of the crop (even it is rolled),” Goto said.
Goto believes there is an upside to raisin sales to warrant higher prices. “A big crop could be a good thing this year. Turkey produced more than 300,000 metric tons of raisins last year. This year the estimate is 240,000 tons. That difference could provide a huge opportunity for California raisin sales into Europe.”
Raisin-type grapes, primarily Thompson seedless, represent the largest acreage in the state. 27 percent of the state’s 732,000 acres of grapes are raisin-type. NASS is estimating 2.4 million tons of raisin-type grapes will be produced this season.
Wineries will take about 300,000 tons of those grapes green to be used to produce concentrate and wine. Most of the rest will be dried at a ratio of roughly 5 tons green for 1 ton dry.
Many Thompson growers have the option of harvesting green or drying for raisins. Raisins are the more expensive option because of the labor costs of picking, drying, rolling and boxing raisins.
Labor continues to an issue in the Central Valley, and growers are paying approximately 33 cents per tray for workers. Last year it was about 25 cents.
Signs are widely posted on vineyards seeking workers, some offering up to $12 for harvest labor.
“If a grower was expecting 25 workers to show up to pick, he likely got only about 10. Workers are also selective about the vineyards where they pick,” Goto.
This has spooked some growers to go green. There are reports some growers have terraced for raisins and at the last minute, harvested green.
Although labor was an issue again, Goto believes at least 75 percent of the crop would be laid to dry before the Sept. 15 insurance deadline to get raisins on the ground to dry.
“We started harvesting earlier than normal and that helped with the labor situation,” Goto said.
DiBuduo said uncertainty over green prices prompted some growers to stop picking soon after harvest began.
“At the end of August some growers stopped picking because of price uncertainty. There was a heat spell and the grapes had trouble sugaring. Growers could hold up and the grapes would not run away until they got a firm offer,” he said.
Early season reports of the wine grape harvest are reporting good production and stable prices with some areas pricing above last season. That is certainly good, according to DiBuduo.
All is not well
However, not all is well.
“Wineries are complaining this year about a lack of space for a big crop,” he said, noting that the tanks are full from last year’s big crop and bulk wine brought in from overseas.
“Some wineries are cutting off deliveries, freeing up excess tonnage,” he said.
Wineries are adding new storage. Gallo is adding 40 new tanks to its Clovis, Calif., winery. That represents 600,000 gallons of additional storage. Gallo has also built a new winery at Livingston with 70 additional large tanks.
“There is considerable capital development by all wineries and that is a good sign,” DiBuduo said.
“The outlook for the industry as a whole still looks good. Exports are up. U.S. consumption is up.”
DiBuduo has been a bit skeptical of late that California growers would not be able to meet future demand because vineyards were not being planted to meet future demand because other crops were more profitable.
He is more optimistic now.
“We are on target to match that demand, especially with the planting of valley grapes over the past two to three years,” he said. Premium wine grape suffered more from the recession, but DiBuduo says that is turning around and headed in the right direction.
“However, there is still a target on our back since the U.S. is the largest wine market in the world and everyone wants to ship wine here.
However, not all is rosy. Despite record raisin prices and strong Thompson prices, raisin-type vineyards continue to be taken out. An estimated 80,000 to 100,000 acres of mostly SJV Thompsons have been pushed out in the past decade.
Both DiBuduo and Goto expect another 15,000 acres to come out this winter because competing crops like almonds and pistachios offer more profit potential and are far cheaper to develop than a new vineyard.
Land prices continue to go up as demand for nut orchard groups skyrockets.
“Unfortunately, prices for a vineyard are roughly the same as for open ground, about $20,000 per acre. That says a lot about the plight of Thompson growers,” Goto said.
More from Western Farm Press
About the Author(s)
You May Also Like
Current Conditions for
Enter a zip code to see the weather conditions for a different location.
Are you ready for a run-up in cattle prices?Dec 01, 2023
Weekly Grain Movement: Corn outperforms trade expectationsDec 04, 2023
Will 2024 be better?Dec 01, 2023