Harvest 2014 Update Newsletter

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CURRENT SITUATION

The California raisin harvest is coming to an end and it appears the 2014 crop will be significantly smaller than last year. The reduction in this year’s raisin-grape yield is being reported as anywhere from 10% to over 30% below last season. Allied Grape Growers is reporting their Thompson Seedless grape yields averaging 7.5 tons per acre compared to more than 10 tons per acre last season.

We cannot ignore the lack of interest by the wineries to purchase this year’s Thompson Seedless grapes for the crush. Unfortunately, this appears to be a phenomena suffered by several varietal grape types in the Central Valley and the impact on the raisin industry, in particular, will depend upon how many acres of raisin-grapes typically picked green will end up being dried. Regardless, this amount will be limited by the very low yield and significant acreage removals over the past several years.

We are also aware that Turkey, a major exporter of dried-grapes, is predicting a large crop that is similar in size to 2012, which exceeded 340,000 tons (California delivered 311,090 tons of Natural Seedless raisins during that same season). This has created a weak market condition in Europe that will have to be faced by our packers. However, it should be noted that Turkish production is predominantly a Sultana which is dipped in a potassium carbonate solution to enhance the sun-drying process and results in a lighter colored dried-grape.

While the growing methods of the Sultana are steeped in generational tradition, they do not compare to the methods employed by California raisin growers, who operate at a far higher standard, and adhere to the toughest regulatory requirements found anywhere in the world, including strict pesticide application guidelines. For reasons of quality, food safety, and even size (Sultanas being significantly smaller than the average California raisin) Turkish Sultanas are not easily interchangeable unless there is a substantial pricing difference between the two products.

The California raisin industry has marketed 100% of the crop for the past 4 years. This year will mark the fifth consecutive season without establishing a reserve. During the past four years, our industry averaged 344,224 tons in deliveries and 337,532 tons in sales at an average field price of $1,680 per ton. This means the California raisin industry value averaged more than $575,000,000 annually during the past four years.

We are confident the 2014 crop of Natural Seedless raisins will be much more similar in size to the 2012 crop of 311,090 tons. The 2012 RBA field price was established at $1,900 per ton. The field price negotiation will determine if present conditions warrant a similar value.

 

INDEPENDENT GROWER MESSAGE

You may have heard the Raisin Bargaining Association radio advertisement running on KMJ580. The message is for independent raisin growers to consider waiting to deliver their 2014 crop of raisins until the RBA has reached agreement on this year’s field price. When RBA growers deliver their crop prior to the price being established, it is placed in Memorandum Storage and not available for the packers to use until the field price is established. The Association will best be able to reach a fair price in the shortest period of time if the independent growers work with the RBA and either hold their fruit or deliver under the terms of Memorandum Storage as well. Naturally, it would be even better if the independent growers became members of the RBA to better support sustainable pricing of California raisins.

 

ADVANCE ON DELIVERY PROGRAM 

As previously mentioned, RBA member raisin deliveries made prior to the establishment of a 2014 field price are placed in Memorandum Storage and not available to packers until a price is reached. Last year the field price was signed on November 22, 2013. We appreciate the importance of cash flow to our membership. The Association has been notified of the following program for RBA growers:

Lion Raisins has announced that it will make a substantial advance payment to contracted RBA growers on 100% of their 2014 deliveries until such time as the RBA price is established in an effort to help growers cover a portion of their immediate costs. The payment will be made within ten days of complete delivery and RBA grower fruit will remain in Memorandum Storage until a field price is established.

 

 

REMEMBER TO INSURE YOUR VALUABLE CROP  

We want to also remind growers to make sure they have proper insurance coverage. Bins will be stacked and covered, parked in yards, or stored in sheds. It is easy to overlook the fact that your valuable product is not covered for Theft, Fire, and Vandalism unless scheduled and added to an existing farm policy.

Call your insurance agent to add this coverage. Premiums can be pro-rated for the amount of time necessary. When the raisins are delivered to your packer, call your agent to remove the coverage. It is also a good idea to check with your trucker to make sure they carry Cargo Insurance before leaving with your raisins; and for grower-hauled raisins, Transit Coverage should be obtained. These relatively inexpensive items can prevent a costly problem later.

While it is certainly not the intent of the RBA to unnecessarily prolong 2014 price negotiations, we are convinced that this year’s crop has more value than last year’s price. Our efforts will target the best price in the shortest period of time. Hopefully this will allow all growers the ability to continue farming raisin-grapes into the future.

 

 

If you missed the Summer 2014 Newsletter, please click here to view that newsletter.