What is in this article?:
- California raisin crop most valuable in history
- Signs of market challenges
- Growers, packers anxiously waiting for raisins to dry in field.
- As much as 16,000 tons lost to rain valued at $27 million.
- Final tonnage could go lower if more rain falls or reconditioning losses are high.
Raisins drying on continuous trays suffered the most damage because they could not be rolled and protected from the rain. They will have to dry slowly, hopefully without too much more damage.
Signs of market challenges
All this points to a challenging marketing year for California raisins.
The raisin industry is selling raisins at a rate of 322,000 tons annually. This year’s crop has been estimated by the Raisin Administrative Committee to be 300,000 tons. Some consider that to be high.
Compounding the situation is an estimate by one major raisin packer that as many as 75,000 tons will be held back from being delivered to the packers, trying to force field prices even higher.
Larger growers have the money to hold their raisins during the first half of the crop year and can even hold them into the next crop year, betting the grape crop will be smaller in 2012, said one industry observer.
High prices and big demand for green and dried Thompsons would seemingly encourage new plantings of raisin grapes.
Not so fast, according to Gotto.
While the raisin industry looks like it may come up short on raisin supplies this year, there is far more uncertainty ahead in the wine grape/concentrate segment. What happens there has a direct impact on the raisin supply and price.
What wineries pay for 2012 Thompsons has a lot to do with marketing the 2011 crush: how much is left in the tanks by next fall and what are alternative sources for raisin-type grapes or other worldwide sources of concentrate like apples.
Goto said it is more costly to plant a new vineyard than a new orchard that is likely to offer far more income certainty.
When growers compare the cost of planting 700 vines per acre and all the trellising necessary compared to an almond orchard of 100 to 200 trees per acre of untrellised trees, it is a big gamble to plant a new Thompson or other raisin-type grape vineyard, according to Goto.
Goto readily admits there is optimism in the raisin industry and generally among Thompson growers, but that optimism translates into the hope prices are high enough to keep vineyards in the ground rather than encourage more planting. In the past decade, an estimated 80,000 to 100,000 acres of Thompsons have been pushed out. Raisins packers hope to stop the bleeding with the $1,700 price.
“With a $1,700 price for raisins and $265 for green Thompsons, you would hope people made enough money to hang around another year” and not plant attractive alternatives like almonds, said Goto.