2015 HARVEST EDITION
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2015 PRICE NEGOTIATIONS
The Raisin Bargaining Association Board of Directors and Management have been discussing and exchanging proposals including several new concepts for the 2015 Natural Seedless raisin field price. We are exploring every alternative to maximize the California Raisin return not only this year but in the years to come. Everyone is well aware of the many crop alternatives available to property owners today. Nut, citrus, and tree fruit crops continue to be popular commodities replacing many of our raisin-grape vineyards. Nobody in the industry wants to continue seeing the vineyard acreage removals but understand the financial impacts driving this trend. The RBA Board of Directors is intent on finding the best price and method of payment for California Raisins to maintain a viable industry for the future.
INDUSTRY SHIPS MORE THAN IT DELIVERS IN 2014/15
The Raisin Administrative Committee (RAC) reported 2014/15 grower deliveries of Natural Seedless raisins was 303,890 sweatbox tons. Packers shipped out the equivalent of 319,151 sweatbox tons of Natural Seedless raisins. Inventory as of August 1, 2015 was reduced by at least 16,000 tons from one year ago, down to 122,954 sweatbox tons, significantly less. This represents the third consecutive year where shipments of California Natural Seedless raisins equaled or were greater than acquisitions.
USDA BONUS BUY OF CALIFORNIA RAISINS
The United States Department of Agriculture recently announced it will purchase $33.5M of California Raisins for distribution to many of the feeding programs under their direction. This amount of funding will purchase more than 15,000 sweatbox tons of California Raisins and a request for bids from our packers was just completed. The five pound bags, fifteen ounce cartons, and 1.33 ounce boxes will be purchased by USDA with Section 32 “Bonus Buy” funding and deliveries will begin in the next few months.
RAC Chairman Monte Schutz, who is also Vice-Chairman of the RBA, should be recognized for his relentless pursuit of this purchase. He was also very instrumental in the USDA purchase of more than $30M of our raisins two years ago. Additional thanks go to Kalem Barserian and Jeffrey Milinovich for their continual efforts to support and locate additional avenues for USDA to purchase California Raisins as well.
MAJOR WORLD SUPPLIERS
The major suppliers of dried-grapes in the world, California and Turkey, will have significantly fewer dried-grapes to sell in 2016. Based on current estimates, Turkey will have approximately 215,000 metric tons of dried-grapes to market this season compared to the 340,000 metric tons that were available last year. According to the California Agricultural Statistics Service, California raisin-grape potential is 13% greater than last year. Turkey’s 125,000 fewer metric tons is equivalent to 137,500 fewer sweatbox tons. Therefore, even with California’s potential for additional production the two largest dried-grape producing countries in the world will have 100,000 fewer tons for sale this year.
TURKEY DRIED-GRAPE SITUATION
The Raisin Bargaining Association Board of Directors sent a small delegation to visit the dried-grape region of Turkey. RBA Chairman Michael Kazarian, CSU Fresno professor of viticulture Dr. Kaan Kurtural, and RBA CEO Glen Goto traveled to the Izmir/Manisa region where the majority of dried-grape vineyard in Turkey is planted. Meetings with growers, packers, the Taris Cooperative, and export brokers made for a whirlwind tour of the region.
A devastating April frost cut across the entire dried-grape growing region and damaged fruit, canes, and vines noticeably. Estimates on the degree of damage to the 2015/16 crop of dried-grapes varied from each segment (growers, packers, and exporters) of the industry. In early August the initial crop estimate was released at 196,109 metric tons which was 60% below the previous year’s production. This estimate was on the high end of estimates we were told on our trip and recently the Turkish Dried-Grape industry indicated it would be updating the estimate in September when harvest is further along. Dried-Grape exports are expected to drop to 170,000 metric tons compared to 245,000 metric tons exported in the previous season. This will certainly provide an opportunity for California Natural Seedless raisins to find additional sales.
GROWERS SHOULD DELIVER AFTER A FIELD PRICE IS ESTABLISHED
Establishing a field price for the California Natural Seedless raisin crop is a process. Negotiations take time and many factors apply for the Association to reach an agreement with the signatory packers. One factor all growers (including independents) can influence is future supply. Delivering your fruit prior to the establishment of the field price diminishes your impact on the negotiation. In cases where storing fruit is not an option, tonnage can be delivered under Memorandum Storage which is how RBA member’s fruit is delivered to packers before a field price is established. This is the best alternative to not delivering your raisin crop since the packer may not utilize any of the product in his production process until it is released.
California and Federal Bargaining statutes require that packers signatory to the RBA may not discriminate against a RBA grower during the process of collective bargaining. We are currently in the collective bargaining process. Therefore, if your RBA packer is offering advances to any of their independent raisin growers, they must offer a similar program to their RBA growers. If you feel you are not being treated fairly by a RBA signatory packer, please call the office at (559) 221-1925 so we can investigate the situation.
Once again it is time to consider an adjustment to your insurance schedule to protect your raisin crop after it is harvested from the field. Big ticket, high value items like a raisin crop require additional coverage to make sure it is protected from fire, vandalism, or theft before it is sent to the packing house and still in your possession.
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.
RBA MOURNS THE LOSS OF PHILIP HAGOPIAN
The Association recently suffered the loss of Philip Hagopian, RBA Board of Director since 2005. Philip provided a calm influence to the Board during a time of great transition. For the past ten years, Philip has asked the questions and provided important insight for the Board to make the best decisions possible. His kindness, knowledge, and experience will be greatly missed. Our deepest condolences go to Carol Ann, Aram, and the entire extended Hagopian family.
WEATHER FORECAST ON RBA WEBSITE
The Raisin Bargaining Association is implementing a harvest season weather forecast pilot program. Each Monday during the months of September and October we will feature the weather forecast of Rufus La Lone on the raisinbargaining.org website. We met Rufus at a conference in Portland, Oregon where he does weekly weather forecasting for the Pacific Northwest region. He is also very knowledgeable about California agriculture and weather forecasting because of his work for Smuckers during their busy harvest season
Hopefully his weather insight may be of assistance during this year’s harvest. Please let us know what you think about this service.
GOOD LUCK WITH THIS YEAR’S HARVEST!