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- Demand for juice concentrate continues strong and may send 2012 Thompson green prices up to $300 per ton.
- Whether the world’s largest winery, Gallo, and other California wineries will pay that remains to be seen. However, a price like that being floated this early in the season is indicative of how tight available supplies are in the Thompson market for 2012.
- A $300 green price equates to $1,800 to $2,000 per ton for what likely will be 100 percent free tonnage raisins.
Demand for juice concentrate continues strong with and may send 2012 Thompson green prices up to $300 per ton.
RBA does the heavy lifting
The RBA was formed to negotiate a field price and put an end to open price contracts. It has been successful. However, it has become a challenge to maintain membership. It costs nothing to join RBA, but about a third of the industry is made up of independent growers, not members of RBA or Sun-Maid Growers.
Schutz supports a strong RBA. “An independent grower only negotiates for himself, which actually weakens the bargaining position by providing tonnage to the packer before a price (agreement) is signed,” says Schutz.
“The RBA does the heavy lifting for the entire industry” and deserves the support of non-cooperative growers said Schutz.
Another major issue surfacing in these times of high prices: RBA growers who want to avoid harvest time risks and sell grapes on the vine to fellow growers or packers to make into raisins delivered to packers under a different identity.
“The problem is the RBA loses the value of that tonnage, and tonnage has power,” says Schutz, explaining that tonnage gives RBA a stronger position with packers and determines how many seats RBA has on the RAC.
Although Thompsons/raisin-type grapes are largely disregarded in any discussion of California wine grapes, the crush of raisin-type grapes (372,000 tons) ranked No. 3 behind Chardonnay (538,000 tons) and Cabernet Sauvignon (383,000 tons) for tonnage crushed in 2011.
Add the crush of table grape varieties (154,000 tons) to the raisin-type crush, and it is close to the Chardonnay crush.
These crushed grapes go into concentrate as well as many California wines and brandy products. Some contend prices for these grapes set the tenor for overall wine grape demand, supplies and prices.
The demand for raisin-type grapes is being duplicated for wine grapes.
“We are receiving calls from all of our California winery representatives asking what is available at what price,” reports Allied Grape Growers President Nat DiBuduo. “The buyers want all the grapes they bought last year and any grapes they can entice the grower not to sale to another winery.
“There is finally competition for California’s wine grapes at prices better than I’ve seen this past decade. The California wine sales are still feeling the effects of the weak economy, with the quality, lower-priced wines showing strong sales, but we are seeing a strengthening in sales at the higher price points as well. These are all signs of better pricing for both growers and vintners. I believe we should see better prices for the near future and far into this decade.”
With an average growth rate of 3 percent for California wines, however, development of new vineyards is minimal.
“We have not seen the development of new wine grape acreage and production to match the demand.
“We are seeing Californian wineries outsourcing bottled and bulk imported wines to satisfy their needs to develop and put wine products on the shelf,” says a disappointed DiBuduo.
California wine grape growers need to look at some moderate amount of vineyard plantings that meets the needs of any particular winery’s specific program for a specific variety in a specific region and price point, according to DiBuduo.
However, DiBuduo does not encourage non-contracted speculative planting.