What is in this article?:
- California’s 3,000 raisin producers are undoubtedly the happiest of the lot of more than 8,000 grape growers statewide.
- Raisins, though, are coming off a near historic 2010 with equally promising 2011 and 2012 seasons ahead.
- “The raisin industry is subject to whatever other people decide not to do,” explains RBA Chief Executive Officer Glen Goto.
The raisin industry is governed by a volume control federal marketing order. Each year directors of the Raisin Administrative Committee estimate production and compare it to anticipated sales. This sales projection is translated by the percentage of the field price growers receive from packers upon delivery of their crop. This is called free tonnage. For example, if the crop is estimated at 100,000 tons and the RAC estimates domestic sales will be 75,000 tons, then the free tonnage would be 75 percent. The remainder of the crop would be put into a reserve pool and sold to packers at prices typically below the field price. These raisins could be used for the federal school lunch program or into subsidizing export raisin sales.
The free tonnage figure is critical each year because that is the money growers receive when harvest is completed. Hopefully, it is enough to pay production costs and guarantee a profit for the year. For example, if the free tonnage is 75 percent on a $1,500 field price, a grower would receive $1,275 per ton upon delivery. If the free tonnage is 100 percent, that would represent an additional $225 ton or $450 per acre upon delivery on a typical 2-ton crop.
This volume control mechanism has provided stability to the raisin industry, which for years has been victimized by the vagrancies of the wine grape and concentrate industry, according to marketing order supporters.
“The raisin industry is subject to whatever other people decide not to do,” explains RBA Chief Executive Officer Glen Goto.
The quandary revolves around the price wineries pay for Thompson seedless grapes for concentrate or wine. If the fresh green price is high enough, many growers will harvest grapes for delivery to wineries. If not, the option is to dry the grapes for raisins.
“The raisin industry really has no control over production when growers can say, ‘If the winery price is not good enough, we can always make raisins,’” said Schutz. This decision is often made just ahead of fall harvest. This uncertainty, Goto and Schutz contend, is why the marketing order is important to the industry.
Although the marketing order has provided some stability, it has not saved thousands of growers and vineyards.