Raisins Update:

May 2008

Sweet prices for grapes
Growers may not be able to supply enough to meet demand of wineries, raisin packers.
By Dennis Pollock / The Fresno Bee 05/14/08 08:51:19

Wineries are offering to buy grapes in the central San Joaquin Valley at prices well above last year's for most varieties. And those offers are coming far earlier than old-timers in the industry can recall. "The prices are getting better, but costs for farming may be outpacing the higher prices," said Nat DiBuduo, president of Allied Grape Growers in Fresno.

DiBuduo said while growers are optimistic, they also must cover skyrocketing bills for fuel, fertilizers and herbicides.

Thompson seedless grapes, a mainstay for the raisin industry as well as a grape crushed for concentrate, is being priced at $225 a ton, 50% higher than last year's $150.

Any grapes in Valley fields at this time remain tiny, just starting to develop. Vines are normally heavy with fruit when the prices are announced.

And it's not uncommon for the announcement to come in July or even August as the harvest occurs, complicating the decision-making of farmers on whether to make their grapes into raisins or sell them green to the wineries for crushing into wine or concentrate.

Grower Steve Schafer said he thinks prices still could go higher, both for wine grapes and raisin grapes.

"The situation you will have now is [raisin] packers competing with wineries for a limited amount of grapes," he said.

The current price for raisins this year is $1,310 a ton.

Schafer said he does not expect prices to fall. He and others cited factors that include the pullout of thousands of acres of wine grapes in recent years, an end to a wine glut and sales of California wine increasing between 2% and 5% annually for the past six years.

Glen Goto, who heads the Raisin Bargaining Association in Fresno, said he is not seeing "the kind of big rush [to sell grapes green] that happened when Gallo came out with $200 a ton in July 2004." He said that prompted lines of growers outside the E&J Gallo plant on Clovis Avenue.

"Now, there's a lot less acreage. Growers have to push a pencil to make a decision," he said. "There's no question there's some concern if we'll have enough grapes to make an adequate raisin crop."

Greg Coleman, vice president of grower relations for Gallo, said the company will not be announcing any cash prices "until later in the season when we have had a chance to fully assess the crop size."

"Since a number of contracts expired in 2007, growers have already approached us this year asking for a contract," he said. "We have responded by offering some minimum prices for those growers wanting to re-sign with us."

DiBuduo said prices for some varieties were floated as early as January.

In recent years, pricing for Thompson seedless grapes has been a roller coaster with dips as low as $65 per ton.

This year, DiBuduo said, he is hearing offers from wineries to growers from Madera County to Kern County that include:

$325 to $400 per ton for chardonnay grapes, compared with an average of $287 last year and a range from $200 to $350.

Cabernet sauvignon at $300 to $400 compared with an average of $260 last year and a range of $120 to $350.

Merlot at $300 to $400 compared with $241 on average in 2007 and a range from $120 to $300.

French colombard at $225 to $250 compared with $180 last year, with a range from $135 to $225.

One variety that is not drawing a lot of activity is white zinfandel, DiBuduo said.

"Most wine growers are excited that the market is strengthening," he said. "But this comes at a time when the cost for fertilizer and sulfur has doubled, when fuel costs are high and the cost of herbicides have increased significantly."

DiBuduo said a crop estimate has not yet been made "but it looks to be an average size crop," he said, adding that statewide, freezing temperatures took away 10% to 15% of the crop.

The reporter can be reached at dpollock@fresnobee.com or (559) 441-6364.

April 2008

It is five months until the 2008 California raisin harvest begins, 18 months before the 2009 crop is finished, and roughly 30 months until
the 2010 raisin crop should be in sweatboxes.

Plenty can happen before those crops are delivered to processors. Frost, rain during harvest, floods, and earthquakes - to name a few.
However, one thing that grape growers who make raisins can take to the bank now is that they will receive at least $1,310 per ton for
each of those three crops.

No other California commodity group can say they know what the minimum price will be for their crop three years down the road.
The Raisin Bargaining Association (RBA), Fresno, Calif., which represents a third of the state’s 3,500 raisin producers, has negotiated a
guaranteed floor price with 14 major raisin packers for its raisin producers for the next three years who want economic assurance they
will have raisins to market.

The price will never be less than $1,310 per dried ton for the 2008, 2009 and 2010 crops. This floor is $100 more than last year. It could
go up from $1,310 based on a supply/demand sliding scale.

With the first ever three-year RBA contract with packers for a guaranteed minimum, raisin producers would be expected to dance in the
streets of Fresno, Calif., the center of U.S. raisin production. All U.S. raisins and 45 percent of one of the world’s best natural dried fruit
snacks are produced within a 60-mile radius of Fresno.

However, it is a bittersweet victory for RBA and its independent packer members. It has been a bloody road to stability. For example:

• An estimated 1,500 raisins growers are gone, either switching to other crops or out of business. Twenty years ago there
were 5,000 growers. Today there are 3,500.

• An estimated 60,000 acres of raisin-type grapes have been removed since 1996. That land will never again be planted to
grapes, raisin-type or otherwise, according to industry experts.

• Raisin production has plummeted from 432,000 dried tons eight years ago to just 300,000 tons in 2007. This represents
the disappearance of almost 600,000 green tons of grapes.

Fortunately, the bleeding has stopped, and the future is bright for those who survived, according to the new RBA president, third
generation Dinuba, Calif. raisin producer Michael Mikaelian, and Glen Goto, RBA chief executive officer.

Even though the RBA represents only a third of the industry, its annual price, negotiated with 14 independent packers, is the benchmark
for grower prices across the entire industry.

The majority of the state’s so-called raisin-type vines are Thompson seedless. Of the roughly 270,000 acres of what the state calls
raisin-type grapes planted in the Central Valley, about 250,000 are Thompson seedless.

Once a triple threat variety because it can be utilized for wine, raisins and table grapes, the Thompson has fallen on hard times. It is no
longer widely sought in the wine industry with movement away from so-called jug wines. The wine industry is shifting more to varietals
produced in coastal areas, leaving the Thompson and other lower value varieties in the Central San Joaquin Valley in less demand. The
table grape industry has a large array of new varieties, many red, that have relegated the Thompson to a second tier in that industry.

Thompsons crushed each season have represented as much as 20 percent of the total crush in the past two decades. It has also been
as low as 10 percent. Prices have been all over the board from a low of $76 per ton to as much as $200 per ton. It has been the
instability of the past 20 years that has driven growers to alternative, more economically attractive permanent crops.

Courtesy of Harry Cline, Farm Press Editorial Staff, Apr 7, 2008

October 2006

An unexpected storm brought rain over the weekend to the local California Raisin Crop. Approximately 30% of the Raisin Crop is still in the fields, with poor drying conditions predicted all week mostly due to temperatures in the 60's and 70's.

The amount of rain was not huge, but will cause some loss on top of a crop that is already 30% shorter than last year. With less heat to dry the remaining 30% of the Raisin Crop, most of the tonnage will have to be dried and reconditioned, causing more loss.

The Raisin Administrative Committee will meet again on October 4, 2006 to set the crop estimate and set preliminary percentages of free and reserve amounts.

Early predictions of this year’s California Raisin Production are 250,000 tons, down from 320,000 tons last year. Price should strengthen with the coming days and weeks as the shortage is revealed.

August 2006

The California Raisin Harvest has begun. Note the photos below. It is being reported that so far it looks very short compared to normal years. Some fields though are reported to have average crops (top photo). To date, wineries have been picking a high of 8 Tons while others are down as low as 4 Tons Green Grapes per acre. As a point of reference, last years average was 9.5 Green Tons per acre.


Average Field


Short Sporadic Field
Short Sporadic Field

Full Field
Full Field

September 2005

This has been a very trying year for raisin growers. Due to unseasonably cool and wet spring the grapes were late in developing. This created extra expenses for the growers in dealing with mildew problems. The summer in California was extremely hot which also slowed the development of the grapes. The crop is about 3 weeks late. On top of this they have had labor shortage in harvesting the grapes and laying them on the ground. Normally by September 20 more than 90% of the crop would have been harvested. As of today Del Rey would estimate that more than 35% of the crop still needed to be harvested.

Del Rey has no new crop raisins delivered yet. Last year at this time more than 60% of the crop had been delivered and ready for market. It is felt that deliveries will not start until the beginning of October.

The weather today is unsettled with a 40% chance of scattered thunderstorms. We are hoping it passes over with little damage. This is the most critical time for raisins so we will continue to watch the market carefully.

September 2004

There are three reasons for this year's shorter California Raisin crop:

Winery-concentrate giant Gallo paid $200 a ton for grapes this year, twice the amount offered the past three years. That prompted many growers of raisin variety grapes to sell them for crushing rather than laying them down for raisins.

The shortcuts farmers have taken with fertilizing and spraying in recent years have produced lower yields.

Thousands of acres of grapevines have been plowed out or simply abandoned because of tough economic conditions in recent years.

It is getting more and more difficult to get the growers to deliver their raisins. After 4 years of depressed pricing they are using all of the leverage possible to get as much as they can and it is for this reason that the contracted levels between the growers and processors continues to change, with increasing amounts to the growers. This situation continues to make it difficult to quote on long-term raisin business.

 August 2004

The Raisin Bargaining Association set this year's field price yesterday August 3rd at $1,110 per ton, $300 more than last year and the first time in five years it has exceeded $1,000 a ton. It's unlikely there will be a surplus this year because many are predicting a harvest in the range of 200,000 tons. That would be the lowest since the rain-damaged crop of 205,700 tons in 1982 and far less than half of the record crop of 433,000 tons in 2000. It has been a long time for the growers to have the ability to receive a fair price for their product. Since the price has been established early to combat the wineries from buying all of the grapes the growers have a disaster clause in the contract that kicks in if the crop size falls below 200,000 tons.

July 2004

This week Gallo winery of California announced a price of $200/ton for Thompson grapes. This is an increase from last year of $125/ton. It is making the situation for raisins very difficult in acquiring supply. Recently the price California growers have been receiving for grapes and raisins has been below production costs and has caused a domino effect of growers removing their vineyards and replacing with other crops. It seems as though the correction has been too great and the total grape acreage for raisin variety grapes has been reduced by about 30,000 acres.

If we were to equate the Gallo price of $200/ton with a 4.5 to 1 dry ratio plus a cultural cost of $200 per dry ton this would equate to a grower raisin price of $1100/ton. The dry grower price has not been set yet. To give you a comparison, the field price last year was $810/ton. If the field price were to go to $1100/ton we would expect the market to be in the $0.85-$0.90/lb. Fob range for new crop.

Del Rey is working diligently to make sure they can acquire enough raisins for their customers. They continue to meet with the Raisin Bargaining Association to hopefully develop a program satisfactory to their growers and customer's best interests.

March 2004

Currently the vines a pushing a little - running a little late. What is known is that 50,000 acres have been pulled out of the ground with Growers not planting new crops. The wine industry is feeling the pressure and this in effect puts continued pressure on the Thompson variety. New crop pricing could be up 15-20% from today's levels if things continue as is.

January 2004

Due to lower crop production and the elimination of reserve inventories, the California raisin industry is achieving a balance with demand.  With the return to growers and packers at the lowest in 20 years, the industry has been forced to make some tough decisions in order to survive. Many growers had ceased producing raisins and have pulled their grapevines. The crop estimate in early October was 276,931 tons down from 377,000 tons in 2002.  Raisins will continue to be in short supply throughout this crop year.  December showed Demand to be slightly up, with the prices to the growers finally increasing.  Growers can now start to make some revenues, but it is still a huge market correction that must take place first.