Monday, October 18, 2010

Opinion Prices looking up for raisin growers

By Don Schrack Published on 10/15/2010

It takes a special breed to be a grower. What with the fluctuations in f.o.b.s, paying sky-high prices for fertilizers and crop-protection chemicals and an often uncertain labor pool, gray hair can come early in life.

Then there’s fickle Mother Nature.

Don Schrack
Staff Writer

For most grower-shippers, her impact often dictates whether a farmer will be around for another year.

A too-short dormancy period, lack of rain, a freeze — all of them can spell disaster before the season begins.

Rollercoaster weather

It is the end of the season, however, that concerns California raisin growers.

The first week or so of October was a rollercoaster for them. With about 15% of the crop still drying on paper trays in the vineyards, the month was just two days old when rain hit the central San Joaquin Valley, the epicenter of this country’s raisin production.

Temperatures stayed low, but wind helped the drying.

Near-record prices
The picture brightened considerably by mid-month. Growers and packers agreed on a near-record price for the dried grapes — right at $1,500 a ton. That’s the highest price in a couple of decades.

As recently as 2002, the per-ton price paid to growers was about $750.

The reserve from last season, another ingredient in the raisin price formula, is at its lowest level in 30 years.

Then there’s the production dip in other raisin-growing countries.

Expect higher prices

The fallout for retail, foodservice and their consumers will be higher prices.

The reason is that supply and demand have equalized, said Gary Schulz, president of the Raisin Administrative Committee, Fresno.

After years of overproduction, thousands of acres of California vineyards have been pulled and replaced by other commodities — or housing developments — or converted to table grapes.

The committee’s 2010 forecast is 293,000 tons, down a big chunk from the 400,000 produced eight years ago.

Exports a factor
Helping the demand side of the scale is foreign buyers who are particularly fond of California raisins.

Exports now gobble up nearly half of the average year’s volume.

Domestic buyers will have to open the purse strings a bit to stay in the bidding.

At last check, about 80,000 tons of 2009 raisins were still in reserve.

Placing orders well before the holiday crush could mean capitalizing on last year’s lower prices.

The higher prices of the 2010 crop may very well stick around — at least into 2012.

The administrative committee, which determines what percentage of the crop will be released for immediate sale and how much will be held in reserve, has concluded all of the 2010 crop will go on the market; no reserve

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