Spring 2014 Newsletter
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RBA ANNUAL MEETING RECAP
The Raisin Bargaining Association celebrated forty-seven years of service on March 8th at the Fresno Convention Center. RBA Chairman, Michael Kazarian, welcomed the large crowd in attendance and requested a moment of silence for the founding director and first President of the Raisin Bargaining Association, Ernest A. Bedrosian who passed away in January. Ernie was a California raisin industry icon who left a very large imprint with his successful effort to first establish the Raisin Bargaining Association and then forming National Raisin Company as well.
Chairman Kazarian pointed out the Association’s role in the industry was two-fold. Not only to return the highest price per ton but also build the overall value of the industry. He noted over the past seven years, the industry has increased in value over 40% but the past season’s negotiation was a wake-up call regarding the impact of the industry voting to operate on a 100% free tonnage every year. Price negotiations become dependent on anticipated production that has proven to be extremely difficult to estimate. It is critical that each year’s crop be sold to prevent a buildup of inventory that impacts the demand situation during the price negotiation process. Simply put, we need to be able to sell large crops when they are produced. We need to work together as an industry to develop programs that would assist us in selling an above average production which may require additional fees to the Raisin Administrative Committee.
CEO Goto reviewed statistics indicating that the number of farms in California is shrinking and the average size of farms in California is growing according to the latest survey conducted by the USDA. We know there are fewer raisin grape growers simply because of the unprecedented amount of raisin grape acreage being removed from production this season (primarily due to the reduction of the prices in both raisins and the raisin grape crush).
RAC Chairman Monte Schutz was congratulated for his efforts to encourage a purchase of California raisins from the USDA. Despite pessimistic opinions that the USDA would be willing to make a large purchase of California raisins, Chairman Schutz lead a delegation to Washington DC in May 2013 to make the argument of a potential excess supply of California raisins that would be available for various government feeding programs. Those important meetings planted a seed with the USDA to commit to purchasing $36 million or roughly 15,000 tons of 2013 crop California raisins. This will be a tremendous relief to the projected inventory of our packers going into the new crop season.
CPA Richard Hughes reported that the Association continues to be in a strong financial position going into the new fiscal year.
RAC Senior Vice President Larry Blagg gave a broad overview of the industry programs that are in place to assist in our export sales. These programs are critical to the industry’s ability to market additional production that may occur while we maintain 100% free tonnage policy in the industry. The RAC assessment has become the only instrument available to the industry to work together in expanding our sales and its value was displayed.
The meeting ended with a fabulous lunch that proved how versatile California raisins can be used throughout a meal. From dinner rolls through dessert, every portion of lunch provided an opportunity for how California raisins could be utilized.
We would like to thank the Caruthers FFA, Paula Insurance Company, California Raisin Marketing Board, Raisin Administrative Committee, Pardini’s Catering, and the Fresno Convention Center for all their contributions to make our 47th RBA Annual Membership Meeting a success.
ZANTE CURRANT PRICING
The Raisin Bargaining Association is announcing the 2013 Zante Currant raisin price to be $1,900 per ton. The price reflects a 10% reduction from last year’s field price of $2,100 due to the Zante inventory situation and potential production. Fortunately the industry has been actively moving Zante Currant raisins at a brisk pace since the beginning of the marketing season which was a key factor in being able to reach the final price.
2014 RBA BIN PURCHASE PROGRAM
The RBA Board of Directors has authorized another Bin Purchase Program for the membership. This is the 3rd year in a row that we have provided this program and many growers have participated. Over the past two years the RBA has financed the purchase of nearly 15,000 new bins for members. We will not know prices of the bin until we see how many growers are interested for 2014, however the program will work similar to past years where we organize the purchase of the bin, provide the financing, and deliver the finished bins to you in time for the 2014 harvest. Repayment of the loan is from the bin credit of $21 per ton and a portion of your 1% RBA patronage dividend which should allow repayment within 6 years or sooner depending on the cost of the bins. Last year the standard cost of a new bin was $84. If you are interested in buying some bins in 2014 please call the office at (559) 221-1925 and we will send you an application.
2014 BUNCH COUNT SURVEY
RBA Grower Representative Steve Spate recently completed the 2014 bunch count survey. The survey resulted in an average of 35.80 bunches per vine which is 17% lower than last year. It also is less than the RBA ten year average of 36.47 bunches per vine.
The bunch count represents the first indicator of the potential grape crop but there are many factors during the growing season that influence the ultimate amount of grapes that will be produced. This year we have witnessed a significantly large amount of raisin grape vineyard acreage removed and the unknown impact of our severely limited water supply are additional factors that will impact the size of the 2014 raisin crop.
RAC DELIVERIES AND SHIPMENTS
Natural Seedless raisin shipments through the month of March 2014 were 221,301 packed tons which are 11% greater than the previous 8-month period last year. Domestic shipments of 128,458 packed tons are 4% higher and export shipments of 92,843 packed tons are 24% higher than last year. This is a very good news for the industry.
2013 deliveries of Natural Seedless raisins reached 344,232 tons through April 12, 2014. With more than two months remaining in the 2013 crop year it appears that the crop estimate of 348,234 ton will likely be reached.
USDA CALIFORNIA RAISIN PURCHASE
Bids were recently accepted for the USDA Bonus Buy purchase of California raisins. The federal government has purchased over 12,000 tons of Natural Seedless raisins at a total cost of nearly 33 million dollars. The raisins will be shipped from April through October and an additional bid was offered for approximately 3 million dollars more. Total additional purchases could total 2,000 tons. This purchase will have a significant impact on the inventory situation leading into the new crop year’s harvest. The RAC should be commended for their effort in securing this important purchase.
RBA BOARD OF DIRECTORS WELCOMES 2 NEW MEMBERS
The Raisin Bargaining Association recently welcomed two new members to the Board of Directors. Michael Perry representing the Kerman district and Jerry Rai from the Selma district recently joined the Board of Directors. These two gentlemen replaced long-time members on the Board of Directors, Michael Koligian of Kerman and Michael O’Brien of Selma. Both Michael’s decided the time was right for them to take a break and chose not to run for reelection. We thank Michael Koligian and Michael O’Brien for their service to the Association and wish Michael Perry and Jerry Rai the best of luck in the future.
FROM THE FIELD
We are off to a nice start for the season with vine growth tracking at 10-14 days ahead of last year, which was early as well. There is an issue that may or may not be a problem. We are receiving more reports regarding portions of fields that are exhibiting a delayed growth pattern compared to other vigorously growing portions of the field.
There may not be much we can do at this time but we may be able to learn from what has taken place this year for the future. In my opinion, after discussions with other growers, the erratic delayed growth could be caused by various sources. Some of which include stress from last year’s large crop load and a lack of winter rainfall or surface water application after the harvest. When the vines went into dormancy they were very susceptible to growth issues, which was compounded by this year’s unseasonably high temps in the 90 degree range. It seems that delayed growth issues are associated with those circumstances.
So now what?
Growing seasons are not all the same and we need to adjust accordingly. Depending on the availability of water this season we may have another dry soil profile to deal with after harvest. You will have to consider the application of water during the winter months to keep some moisture in the ground especially if winter rainfall is absent again. One thing for certain is that water is not something that can be cutback without directly having an adverse impact on the highest potential production and maturity of the growing grapes.