Those changes are not coming easy in an industry where the average age of its 5,000 producers is 62 with an average vineyard size of 40 acres.

The changes are being forced on producers because it is an industry in an economic free fall, tumbling 34 percent in crop value in just two years due to overproduction and low sales. Prices have fallen to levels not seen in 20 years.

"There will be a totally new industry 10 years from now," Koligian told the annual Agribusiness Management Conference in Fresno recently.

California’s raisin industry has long been competing in a world market with a federal post-harvest volume control marketing order. Marketing order delegates determine crop size and market potential and release almost always less than 100 percent of the crop ("free tonnage") to compete against lower-price world competitors. The rest is considered surplus and sold at below what the industry sees as free tonnage prices.

In the past surplus raisins have been used for subsidized school lunch programs, distilled into alcohol and even used for cattle feed.

Import raisin gains

California-produced raisins have generally enjoyed a strong reputation for quality and earned higher prices, but that is changing. Turkish, Iranian and Afghanistan raisin production is not only increasing, but also quality has also improved, said Koligian.

This is putting a price squeeze on California raisin growers. The only way out, according to Koligian, is sales growth.

Koligian said pressure is mounting to compete toe-to-toe for world markets against foreign producers. However, most growers cannot do that using the long established, labor-intensive methods of drying raisins on paper trays between vine rows.

DOV advances

Increasingly more producers are investing $5,000 per acre to re-trellis or establish new vineyards where raisin-type grapes, mostly Thompson seedless, are Dried-On-The-Vine (DOV).

These DOV vineyards not only eliminate much of the hand labor associated with on-ground drying, but they produce as many as three times as many raisins as field dried raisin vineyards. This reduces the per ton cost of producing the fruit, meaning DOV producers can produce more tons for less money than on-ground producers.

This disparity is causing considerable division in the industry, and resulting in on-line raisin price bidding wars, Koligian said. This is also shattering the long-standing relationships between packers and growers.

"I look forward to getting back together again," he said.