HARVEST UPDATE 2016
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A CALL FOR CONCILIATION
It is most assuredly in the control of this California raisin industry (growers and packers) to keep supply and demand in balance and move our business forward.
Rather than continuing to require additional concessions on the backs of the growers we need to sell more raisins. The solution to the present imbalance between the supply and demand for raisins is not price. It is innovation of new products, formulations that use raisins, modern packaging, modern sales programs, and all the avenues of marketing. Just imagine how the cranberry industry turned a waste product (cranberry skins) into Craisins™ that have taken precious grocery shelf space and industrial business away from us.
Let’s put our ingenuity, skills, and determination together to build this industry into a one billion dollar crop, instead of reversing the gains achieved over the past decade.
Already this 2016 crop will yield fewer tons – juice yields are down, fewer juice growers will make raisins, and pullouts continued over the last twelve months. Our quality looks good.
The Raisin Administrative Committee (RAC) calculation of carry-in inventory is 158,287 tons as of August 1, 2016. This is based on what each packer reports to the RAC and verified by USDA inspection records. However the desired carry-in tonnage is 100,000 tons to supply the August-September-October shipments, while the 2016 crop is being delivered. That would mean there are less than 60,000 tons of excess raisins which would be all used up if the USDA increases its raisin purchases and shipments rebounded to 2014 levels.
This year’s price of raisins should remain at $1,600 per ton and be payable at last year’s 90%. At this time the packers and RBA are not in agreement and so the issue of price determination, percentage released, and payment terms will go to conciliation to help the parties agree on all issues.
The livelihood of all raisin producers is on the line, and the RBA, through its 25 directors, will propose a positive, practical, and meaningful plan to sell all RBA tonnage at a price and on terms to accomplish this goal.
2015 PAYMENT UPDATE
The 2015 Memorandum of Understanding (MOU) with our signatory packers included provisions for 90% of deliveries to be paid on or before May 15, 2016 and providing processors three options for payment of the remaining 10% of your deliveries. Those options included:
1) Pay $1,600 per ton on or before May 15, 2016.
2) Pay $1,650 per ton on or before August 15, 2016.
3) Pay the 2016 RBA field price per ton 15 days after it is announced.
Most signatory packers will wait until the 2016 RBA field price is announced to make the final payment for the 10% remaining of 2015 deliveries.
2016 PACKER NEGOTIATIONS
The RBA has a 49 year history of bargaining in good faith with our signatory packers. This has resulted in the establishment of a price for California raisins each and every one of those years. While we are open to any viable methods to change the past practices of the California raisin industry, we will never agree to a consignment form of doing business. The Raisin Bargaining Association was formed to stop the “open-contract” form of buying California raisins from the growers. The Association fully intends to represent and protect all our members from any illegal tactics that may occur against them. Our packers have agreed to bargain in good faith for the 2016 harvest of your crop and cannot discriminate against RBA members in favor of independent raisin growers. While we are negotiating a 2016 Memorandum of Understanding normal business practices should be in existence.
The RBA and our signatory packers have been discussing the 2016 harvest terms since the month of May and have yet to gain any momentum to reach an agreement. We have received a request from several of our signatory packers to participate in state mandated conciliation to reach an agreement. The RBA Board of Directors has voted to participate in the conciliation with all signatory packers and the process will begin shortly.
We want a price announced before November 1, 2016 through the conciliation process. The conciliation process will provide the opportunity to determine a fair return for growers to produce the safest high quality dried grapes in the world and packers to process and sell those California raisins. The RAC has made a strong case to the USDA for a major Bonus Buy purchase of California raisins to utilize in their many feeding programs. Our current inventory situation should be a short-term phenomenon. We all have learned over the years that merely reducing the price of California raisins does not necessarily result in greater shipments.
RBA INDIVIDUAL AGREEMENTS & EMPTY BINS
With harvest just around the corner RBA growers need to be reminded the only authorized contract for members to be signing is a RBA Individual Agreement with their signatory packer. Attached is a copy of the current RBA Individual Agreement for the purchase of your crop. These agreements are not valid until a signed MOU between the signatory packer and Association is executed.
We understand there may be some signatory packers indicating they will not release empty bins without a signed RBA agreement. The RBA Individual Agreement is the only document that should be necessary in this event however some packers may require an empty bin agreement to protect their bin investment. Growers that have purchased their bins through the RBA Bin Purchase program should have access to either their own bins or a replacement if necessary. The RBA Bin Purchase program has been a good way for growers to invest in their operations and has been available for our members annually.
We fully intend that all RBA member raisins will be purchased in the 2016 harvest season unless there are signatory packers that do not buy any California raisins this year from the RBA or independent growers. Our signatory packers have agreed to bargain in good faith which once again means they cannot and will not be allowed to discriminate against the RBA membership.
REVOLVING FUND CHECKS
Payments for the 2015-16 RBA Revolving Fund will be made in the month of August. The Revolving Fund represents 1% of your payment held in trust by your signatory packer. These funds are invoiced by the Association and the RBA Board of Directors determines the allocation of the money. Please call the office if you have questions.
2015 FINAL RAC SHIPMENTS
Final figures for the 2015-16 marketing season ending July 31, 2016 were as follows:
Acquisitions Natural Seedless 336,697 swb. tons
Shipments Domestic 196,238 swb. tons
Export 106,149 swb. tons
Total Shipments 302,387 swb. tons
The RBA Board of Directors is pleased to provide weekly weather forecasts from Rufus LaLone of The Weather Café. Every Friday during the months of August, September, and October you will find his outlook on the San Joaquin Valley weather situation at our website: www.raisinbargaining.com. We hope you find his reports on our specific weather useful during this harvest season. You can also catch his bi-weekly forecasts for the Pacific North West region on the OVS website.
The acclaimed & uniquely informative long-range forecasts go well with your morning beverage every Monday & Friday. Grab a cup and become a WxCafe™ patron!
► Click on The WxCafe™, top right corner of www.OVS.com
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