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Expect Price Increases as Demand for Thompson Seedless Raisins Nearly Doubles

A combination of factors including a late crop, a shortage of harvest workers, and demand for Thompson seedless grapes for both raisins and wine production, has prompted a price war that many growers have not seen in nearly ten years.

The region’s major wineries bumped their July per-ton price $15 to $265. Wineries generally have paid $155 to $210 a ton in the past several years. Raisin packers, responding to growing consumer demand, have upped the ante this year with the highest price ever paid for Thompsons (a minimum of $1700/ton, up from $1500/ton in 2010).

The two sides of the market have caused demand for Thompson grapes to nearly double from 273.000 tons in 2010, to an estimated 450,000 to 500,000 tons in 2011. This leaves Thompson seedless growers in the enviable position of having to decide whether to sell their grapes as raisins or grapes for crush. It takes about four and a half tons of fresh grapes to make a ton of raisins.

Growers of Thompson seedless grapes have three options for their crop each year: table grapes, raisins or grapes to be crushed for wineries. The decision to grow table grapes must be made very early in the production cycle because it involves a different way of pruning the vines. As far as drying for raisins or going green to the crush, that decision can be made right up to the point where harvest begins.

There were many reasons for raisin growers to shift gears and send more grapes to wineries this season. Some had trouble finding enough workers to pick their raisin grapes and many growers could only find half the workers needed. On average, raisin farmers paid more than 30 cents per tray, 3 to 4 cents more than in 2010. Still others missed the Sept. 20 deadline to qualify for insurance, partially because of the shortage of workers. These growers didn’t want to risk being rained on and sent the grapes to the wineries.

Last year, 275,000 tons of raisin-type grapes were crushed and sent to wineries. This year speculation is that it will be over 400,000 tons crushed, with many experts thinking it will be closer to half a million. With fewer grapes available for raisin production, expect prices to increase in the coming months.

A Late Harvest Causes Weather Concerns for Growers

In a typical year, raisin growers have picked and rolled their raisins by the end of August, early September. Due to an unseasonably cool spring and summer, the raisin crop is approximately 2-3 weeks late this season leaving it susceptible to October rains and weather damage.

Fears of rain were realized last week when a storm dumped more than an inch of rain on parts of California’s agricultural heartland in less than five hours, flooding streets, uprooting trees and soaking a crop of raisins drying in vineyards.

“Overall, we think 40 to 50 percent of the raisin crop has been exposed,” said a member of the Fresno Cooperative Raisin Growers. “If we get a little bit of wind and sun, it could help. But with the rain comes mold, so it all depends on what stage of drying they are in.”

While it is still too early to tell how the rains have affected the crops, many growers feel they weathered last week’s storm fairly well. However the real concern is that rains and cool weather will not let up. Not only is mold a potential problem, but the rain can cause dirt and sand to splash onto the trays. If the sand becomes embedded, the raisins must be washed adding an additional cost to growers.

The Raisin Administrative Committee is scheduled to meet this week and they are expected to issue their first crop estimate for this year. We will update this posting with more info when the estimate is released.

California produces 360,000 tons of raisins annually, or about 40 percent of the world total. The vast majority of California raisins are consumed in the United States, with nearly 170,000 tons in 2009-10. The United States is followed by the United Kingdom, Japan, Germany, China and Canada. According to the U.S. Department of Agriculture Foreign Agricultural Service, global raisin consumption is forecast to expand 4 percent to 1.1 million metric tons in 2011-12, driven mainly by China’s rebounding domestic supplies.



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