2018 Raisin Price Still in Limbo

Discussions Continue Over Raisin Price

News Release Edited by Patrick Cavanaugh

The Board of Directors of the Fresno-based Raisin Bargaining Association have offered to sell the 2018 Natural Seedless Raisin Crop for $2,250.00 per ton. Also, the board has offered to sell both the 2018 & 2019 crops for $2,150.00 per ton. This 2-year Memorandum of Understanding (M.O.U.) at $2,150.00 per ton has safeguards in it for the second year in case there are changes that could force the raisin price to go higher or lower, with a lower bottom not to fall below $2,000.00 per ton.

Last year, they had 12 signatory packers agree to the M.O.U. negotiated at $1,800.00 per ton. This year, they have been instructed that Sun-Maid has rejected both the $2,250.00 one year contract and the $2,150.00 two year contract. They have also advised the RBA to try and move the 2,000 tons of RBA growers to other packers, which we are in the process of doing.

Of the remaining 11 packers, 6 have agreed to accept the $2,150.00 2-year plan. Those six packers are Central California Packing Company, Chooljian Brothers Packing Company, Inc., Del Rey Packing Company, National Raisin Company, River Ranch Raisins, LLC., and Sun Valley Raisins, Inc.

The 5 remaining packers who have rejected both the one year price at $2,250.00 per ton and the $2,150.00 per ton two-year M.O.U. include: Boghosian Raisin Packing Company, Inc., Caruthers Raisin Packing Company, Inc., Fresno Cooperative Raisin Growers, Inc., Lion Raisins, and Victor Packing Company.

In the discussion with the packers who have not agreed to M.O.U. terms, their arguments were that the $2,250.00 price was too high and the $2,150.00 price was acceptable but not for 2 years. Discussions will continue until Friday, October 12. For updates please go to our website at www.RaisinBargainingAssociation.com and click on the “From the Office” tab.

Raisin Growers Having a Tough Year

Kalem Barserian: Raisin Production is Down

By Patrick Cavanaugh, Farm News Director

The California raisin industry’s having a tough year on production, as well as a few rainstorms that impacted the crop.

Kalem Barserian

Kalem Barserian is CEO of the Raisin Bargaining Association in Fresno, an organization that goes to bat for growers when it comes to pricing. He noted a phenomenon that happens when it rains a lot, just ahead of Thompson seedless bud break as the vines came out of dormancy.

“For some reason, with all the rain – and I could go back 60, 70 years and show where ever there was a heavy rain year, the plants seemed to take a rest – and this was no different than what happened in 1998, when we had 20 inches of rain and we had only 7.5 grain tons, while the average green tonnage is 9.5 tons,” Barserian explained.

“The grape set was among the lowest in history, with only 27 bunches per vine. … The historical average is 39 bunches.”

“And then during the late summer, on Sept. 11 and Sept. 21, two rainstorms came through and tested the rain grower’s patience,” Barserian said. “The moisture did not cause the problem to the drying grapes. However the rain caused sand to bounce up on the trays with the grapes. The sand got into the wrinkles of the grapes and as they dried down further, it became embedded sand.”

“This is where the loss for the grower comes, because the damaged, embedded sand grapes must be reconstituted, reconditioned and cleaned up again. Ultimately, the quality is okay, but it is an additional cost to the grower,” Barserian explained.

According to Barserian, California used to account for 50 percent of the world production of raisins. Today, we are only 20 percent of the production, behind Turkey.

Many growers have traded in the raisin vineyard for other profitable crops such as almond or mandarins.

Raisins: Quality Is Up, Tonnage Is Down

Fewer but Sweeter Raisins this Year 

 

By Brian German, Associate Broadcaster

 

After last year’s tremendously successful raisin harvest, Steve Spate a fourth generation farmer, said it is understandable to see a bit of a decline in tonnage this year. Spate, who is also grower representative for the Raisin Bargaining Association (RBA), which has been representing the raisin industry for nearly 50 years, said, “Just by nature, the year following a high crop year could potentially be down—especially for Thompson Seedless Grapes,” noted Spate.

Steve Spate, grower representative, Raisin Bargaining Association (RBA)
Steve Spate, grower representative, Raisin Bargaining Association (RBA)

Raisin grape harvest in the central San Joaquin Valley is a two-month process for growers, typically running from late August to mid-to-late October, depending on crop maturity. Hard numbers on this year’s overall crop won’t be available for a few more months, but growers are reporting a significant decline from last year’s harvest. “Last year was a large crop,” said Spate,” so definitely we were considering that this year would be down—but not as severely as some growers have reported. We have people reporting differences in yield from 10% to as high as almost 50%.”

There are various possible reasons for this year’s drop in yield, aside from the cyclical nature of grapevines. “I think drought conditions last year may have played a big role, while the buds were setting basically for this year,” said Spate. He also suggested water was a significant factor this year as well, particularly if growers lacked enough surface water deliveries or a grower had a pump issue and there was a critical time where he or she didn’t get water on the field.

The overall reduction in acreage of this year’s harvest is yet another factor to consider. Industry experts report approximately 10K to 15K fewer raisin grape acres compared to last year. This shrinkage is attributed to growers replacing raisin crops with higher-value crops such as almonds.

Sun-Dried Raisins
Sun-Dried Raisins

As many industries struggled with the cost and availability of labor, Spate commented that it wasn’t too difficult to fill their labor needs this year. “Going into the year growers made different decisions and chose more mechanized harvests. The handpicking crews were much larger and seemed to be readily available,” Spate said.

While grape growers were thankful for the amount of available labor this year, they have some serious concerns regarding the cost of labor in the next few years. Between a minimum wage that will incrementally climb to $15 an hour in a couple of years and the newly established shorter workday for farmworkers [before reaching the overtime threshold of 8 hours, as opposed to 10 hours], growers consider the investment in mechanization as being more cost effective in the long run.

“I think we will continue to see shifts towards any type of mechanization possible due to some of those minimum wage [increases].” Before the governor signed the overtime bill, Spate said, “We used to have the ability to have workers work longer hours before overtime kicked in.”

Raisin grape growers will still be harvesting for the next few weeks. Although it appears overall tonnage is down a bit, sugar levels seem to be higher than last year, resulting in better quality raisins.

After Tough Negotiation, Raisin Price Decided

Raisin Price Set At $1650  Per Ton

 

More Thompson Seedless Vineyards To Be Pushed

 

The Raisin Bargaining Association (RBA) announced that it has reached agreement with its signatory packers on the 2013-14 Natural Seedless raisin harvest announced field price.  The price will be one thousand six hundred fifty dollars ($1,650.00) per ton or eighty-two and one half cents ($0.825) per pound.  The price is calculated using the following formula:

         Base price                                $1,457.00                      $0.7285

         Moisture @ 10%                             80.00                          .04

         Maturity @ 75%                              50.00                          .025

         Container rental                              21.00                          .0105

         Transportation (minimum)              15.00                           .0075

         RAC assessment                            14.00                          .007

         USDA inspection                            13.00                          .0065

         2013 Announced RBA field price     $1,650.00 per ton  $0.825 per lb.

Raisin growers have sent a strong message to the industry that they prefer selling raisins on a 100% basis now and into the future.  With that in mind, the Board of Directors of the Association worked diligently toward a compromise with their signatory packers to establish a fair price that reflects the additional California raisin production for this season. 

The Raisin Administrative Committee (RAC) recently estimated the 2013 Natural Seedless raisin crop at 348,437 tons in comparison to deliveries of 311,090 tons last year.  The $1,650 per ton price for the 2013 Natural Seedless raisin crop is a 13% reduction to last year but takes into account the additional crop that is estimated for production as well as the challenging market conditions that the industry will be facing.

The agreement calls for growers to be paid in three installments this year as opposed to four installments last season.  65% of the payment will be due fifteen (15) days after completion of delivery, 20% will be due to growers on or before February 28, 2014, and the final 15% will be payable on or before April 30, 2014.

raisin character

In the past, grower reserve raisins generated funds to assist the industry in marketing additional production into world markets.  The effort to sell this year’s additional production without reserve programs and the temporary elimination of state marketing and promotion funding are two reasons why the RAC assessment of fourteen dollars ($14) per ton has been included in the pricing formula.  This will provide an opportunity for the industry to work together through the RAC in support of efforts to market 100% of each year’s crop without reserves.

As reported from the International Dried Grape Producing Countries Conference in October, there continue to be strong indicators that Turkey has a significantly smaller dried grape crop to market this coming season.  California and Turkey are the two largest producers of dried grapes in the world.  It was also reported that South Africa, Chile, and Argentina have suffered tremendous frost damage in their vineyards, which will severely limit their harvest, which begins in January. The ability to take full advantage of what appears to be a tremendous sales opportunity requires an announced field price.

The Raisin Bargaining Association Board of Directors understood the importance of establishing this important benchmark in a timely manner to sell the maximum amount of raisins this year.  However, they are also well aware of the impact it has on the grower community.  Labor, water, and energy costs have significantly increased for growers over the past twelve months further squeezing their bottom line margins.  As agricultural resources in California are depleted, vineyard owners will continue to seek the best utilization of their land. 

California Ag Today editors spoke with Steven Spate, an RBA Grower representative, and a raisin grower. He said: “We are witnessing a large amount of raisin grape vineyards being removed (between 8,000 and 15,000 acres) from production this year in favor of more mechanized and profitable crops such as almonds, walnuts, and citrus.” 

“Time will tell what impact this acreage reduction will have on the future of the California raisin industry but taking the necessary steps to market this year’s crop was extremely important for the Raisin Bargaining Association to accomplish.  We are now counting on the California raisin packers to sell this crop to provide a better future for the remaining growers in our industry,” Spate said.

Spate added that processors thought the price should have been lower, but growers generally thought that shortages in Turkey and other areas should have boosted the price. “But still, there are excess raisins on the market and it has created a downswing in price.

Growers who are pushing out vineyards say that the lower price is only one factor that is in play. Chronic labor shortages are also encouraging growers to plant a less labor-intensive crop.