What is in this article?:
- Raisin packers up raisin price by $200 per ton to get needed supplies to meet demand.
- Wineries counter with price offering for Thompsons to $265 per ton green.
- Late harvest, weather concerns shift 125,000 tons from dry to green in one weekend.
Strong raisin sales, heightened demand for Thompson seedless grapes for crushing, a late harvest start due to low grape sugar content and a surprising farm worker shortage are combining to create an early harvest time pricing war unlike San Joaquin Valley grape growers have seen for at least a decade.
As grape harvest trucks rumbled to the wineries with their first loads of grapes, clouds loomed overhead the second weekend in September that prompted SJV raisin buyers to increase their offering price for 2011 raisins by a whopping 13 percent, hoping to turn a potential stampede to green harvest at the expense of raisin drying.
Raisin packers have offered $1,700 per ton price for 2011 Natural Thompson Seedless (NTS) raisins on the eve of raisin harvest. This is well above already established $1,500 per ton as part of a two-year bargaining agreement signed last season. The new contract price is the highest price ever offered for a crop not weather impacted. The Raisin Bargaining Association is expected to approve an unusual 11th hour contract price increase this week.
Packers hope it will stem the flow to green. One raisin official estimated 125,000 tons of Thompsons were diverted to green on the weekend of Sept. 9-10 due to the thunderstorms that popped up in the valley. Showers may not have damaged many grapes drying in the field, but they hastened decisions by growers to go green to wineries because low sugar levels in mid-September were increasing the green to dry ratio to five-to-one, the highest level since 1980. It normally takes about 4.5 tons green to make 1 ton of sun-dried raisins.
This high dry ratio is the result of a late crop and slower sugar development. Statewide, California’s grape crop is at least two weeks behind normal. This is exacerbated by the fact raisin growers have mid-September insurance deadlines to begin drying raisins or they nullify their insurance coverage. It’s highly unlikely many raisin growers passed up buying insurance this season with the price of raisins the highest ever.
Wineries are fighting back, sweetening the pot financially to attract more Thompsons to the crushers. As growers started delivering low sugar Thompsons for sparkling wine and similar products, several wineries raised the Thompson price to $265 per ton from the pre-harvest, record price of $250 per ton offer.
This bidding for Thompsons comes with what is turning out to be a surprisingly larger Thompson crop than earlier projected. What was expected be an average crop of about 9.8 tons per acre, is turning out to be an average of 11.25 ton per acre green crop. However, with the low sugar issue, the return per ton for growers will be closer to the money for a 10-ton crop.