Harvest 2013 Newsletter
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RBA TO SUPPORT 100% FREE TONNAGE AND $1,900 FIELD PRICE
The Raisin Bargaining Association Board of Directors voted unanimously to support another season free from volume regulation managed by the Raisin Administrative Committee. This would be the 4th consecutive season of 100% free tonnage for the industry. The Board of Directors recognizes the changes occurring in California agriculture and is confident the vast majority of the raisin industry is supportive of this concept and prepared to make the necessary adjustments to accommodate this marketing policy.
The Board of Directors also made it very clear that the Association has been in preliminary discussions with signatory packers but no offers have been put on the table. Any prices being mentioned at this point in time are simply speculation. The field price for Natural Seedless raisins is $1,900 per ton. The Board is preparing to negotiate for the new raisin crop on that basis. While price is the critical element in the negotiations, terms and conditions will be very important as we must continue to work with our processors to make certain financing remains viable for the increased value of our raisins. Payment terms will be an important area of negotiation as we must be prepared to take the necessary steps to protect the $590 million farm gate revenue that has been established this past year.
Finally, members need to be prepared for a 2013 field price agreement that may be announced later than the past few seasons. There will be an adequate inventory as of August 1st to meet sales requirements through October which may influence our ability to reach any agreement.
TURKISH CROP SIGNIFICANTLY SMALLER
The official dried grape crop estimate for Turkey was released on August 1, 2013. Findings were based on official visits to approximately 600 vineyards in the main dried grape regions and the new crop is expected to be 242,635 metric tons (mt). This would be 25% smaller than last year’s production of 320,000 mt and slightly more than the 227,000 mt that were actually exported in the previous twelve months. There is some concern that the estimate may actually be overstated and the crop could be as small as 225,000 mt.
California raisin exports are an important segment of our business. 35 to 40% of sales go into the export markets and the United Kingdom and European continent are substantial consumers of dried grapes. Turkey is the major supplier of these markets and an opportunity to sell more California Raisins appears to be very achievable.
RAISIN ADMINISTRATIVE COMMITTEE
The Raisin Administrative Committee sent a delegation to Washington D.C. in June to discuss the possibility of USDA purchases of California raisins. The delegation was informed that funding was limited and the request would be reevaluated after the harvest. However, new mandates on school feeding programs require a fruit or vegetable serving on each and every meal served. This is opening up a large market for specialty crop commodities such as California Raisins. We will be pursuing opportunities with school districts throughout the nation to increase their consumption of our product.
CRMB WILL NOT ASSESS 2013/14 RAISIN CROP
The California Raisin Marketing Board (CRMB) has unanimously voted to suspend the collection of the twenty ($20) dollar assessments for the 2013/14 crop year. Staff at the CRMB has been directed to limit activities based on board approval. This is the result of the recent ruling in the litigation that has taken place in the California Superior Court.
The CRMB has been involved in a legal proceeding with several plaintiffs who have challenged the State Marketing Order on various constitutional and statutory grounds. After a twenty day trial, post trial briefings, and a hearing on the Proposed Statement of Decision, Judge Raymond Cadei, has ruled that the California Raisin Marketing Board was not established within the scope of the authority provided by the California Marketing Act. The decision has been stayed (placed on hold) until the appeal process can be completed. The CRMB has voted unanimously to appeal the decision.
RAISIN GRAPE CROP
Despite favorable conditions early in the calendar year, grape growers have been faced with many challenges to produce this year’s crop. An extremely dry spring has been followed by an excessively hot summer resulting in underground water supplies falling below the settings of many growers pumps this season. While there have been few reports of mildew outbreaks it is very noticeable how the summer heat has raised an issue with mite damage in many vineyards. Pumping water from the underground (if possible) and additional sprays for mite control has significantly increased the cost and reduced the size of this year’s potential production.
A critical component to the size of any raisin crop is how many raisin grapes are going to be crushed by the wineries. As of this printing, the early-sugar grape harvest has begun and yields are larger than last year which was to be expected. We have yet to hear of any significant news other than the minimum $285 per ton multi-year offers to compare to last year’s price of $325 per green ton.
SUPREME COURT DECISION
The Supreme Court unanimously agreed to send the appeal of Marvin Horne/Raisin Valley Farms back to the Ninth Circuit Court of Appeals to rule on the issue of whether he pays the Raisin Administrative Committee (RAC) for penalties and the value of reserve raisins he did not hold in reserve for crop years 2002 and 2003. The Supreme Court ruled that the Ninth Circuit Court of Appeals had jurisdiction over that decision as opposed to Federal Claims Court where it was originally sent. The Ninth Circuit Court of Appeals is currently reviewing briefs from the two parties on what will be its next course of action.
There have been questions regarding whether RBA growers may receive harvest advances from signatory packers without a signed MOU for 2013. The RBA Board of Directors voted to provide blanket consent to signatory packers allowing them to lien raisins up to the amount of any harvest loans they give to members.
PROTECT YOUR VALUABLE CROP
With harvest ready to begin shortly we want to provide a friendly reminder about insuring your valuable crop. 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. If we should be faced with wet weather and growers build “homemade dehydrators,” raisins could be exposed to additional hazards.
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 he has 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.