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.

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TREE NUTS, EXCEPT PECANS, REMAIN STRONG IN EXPORTS

Tree Nuts, Still the 800-Pound Gorilla

Crash of the U.S. Pecan Market a Cautionary Tale, Says Rabobank

The export market for U.S. almonds, walnuts, pistachios and pecans continued to grow in 2012, reaching $6 billion dollars and accounting for over 60 percent of U.S. production. In its most recent report, “Riding The Growth Curve – Can U.S. Tree Nut Exports Continue to Defy Gravity?,” Rabobank questions whether this growth will continue. The author of the report, Karen Halliburton Barber, senior analyst, Produce for the Rabobank Food & Agribusiness Research and Advisory Group, says that it should, but that the industry shouldn’t rest on its laurels. “Assuming water limitations will not significantly restrict U.S. production, the U.S. tree nut sector still faces the fundamental uncertainty of when supply and demand will stabilize,” said Barber. “That said, the U.S. tree nut sector is in a good competitive position given its leadership in production and trading history.”In the report, Barber examines the main commodities making up the U.S. tree nut sector:
 
     Almonds – “Here, the U.S. is the 800-pound gorilla and accounts for over 78 percent of total global production. This is where the U.S. is clearly in a good competitive position but needs to beware of the oversupply spiral.”
     
     Pistachios – “Iran is slowing down, but they are not out. Water scarcity and weather have caused declines in production in recent years. However, new growth areas are cropping up and competition may heat up in the medium term.”
     
     Walnuts – “This is the only sector where the U.S. is not the predominant global supplier.  Although China is a net importer because of its large domestic demand,  its share of global production is greater than that of the U.S., providing competition for U.S. walnuts in the Chinese market. An added risk factor is that Chile has begun to compete with the U.S. on quality in key growth markets.”
     
     Pecans – “This segment is the cautionary tale of the report, warning of what could happen if the right factors line up at the same time. In 2012, the U.S. pecan market crashed. Now largely dependent on the global export market, U.S. pecans were hit with competitive pressures from South Africa, while at the same time dealing with lower yields because of weather challenges. The result of these factors was a 50 percent reduction in grower prices for pecans from July 2011 to January 2013.”

The report concludes by noting that the U.S. tree nut sector’s overdependence on the Chinese market poses the greatest challenge. Yet, U.S. producers are poised for growth over the longer term—both in China and globally. The strategy employed by the almond, walnut and pistachio industries of  a more balanced buyer/supplier parity approach can help continue to moderate the risk.