The Raisin Bargaining Association (RBA) has put a $1,900 per ton offer on the table to raisin packers for this season’s raisin crop.
The 95-cents per pound price represents a 12 percent increase over the 2011 price.
RBA signatory packers have until Sept. 14 to accept the offer.
The RBA price offer is the second salvo in the 2012 battle for Thompson seedless grapes. Wineries fired the first volley about three weeks ago when they offered $325 per ton for green raisin-type grapes.
(For more, see: Thompson green price reaches $325 per ton for short crop)
This is 23 percent higher than the 2011 green price and is attracting significant tonnage to wineries.
There are three reasons for the second year of aggressive bidding for raisin-type grapes. Last season the RBA and its packer had agreed to a $1,500 per ton price for raisins well in advance of harvest, but that was raised to $1,700 per ton when wineries upped the green price from $250 per ton to $265 at harvest time.
One reason for this bidding war is that as many as 80,000 acres of Thompson seedless grapes have been bulldozed out of the ground in the past decade due to low grape prices and replaced with more attractive alternative crops like almonds, pistachios, walnuts and pomegranates. These orchard crops are cheaper to establish than a vineyard and have historically offered more stable prices than grapes.
A second reason is the yield per acre of raisin-grapes has been estimated to be 13 percent lower than last year’s production by NASS. However, as the harvest began, it became obvious the crop is off even more than that. Most are saying it is off at least 25 percent. With fewer acres being picked for raisins and fewer grapes on those acres, this year’s raisin crop will be 15 percent to 25 percent less than 2011 which would make it one of the smallest raisin crops in over a decade, according to Glen Goto, RBA chief executive officer.
The third issue fueling this bidding war is the lack of labor. Shortages have been reported summer long in the tree fruit industry and raisin growers expect the shortage to continue with the raisin harvest. It takes at least 20,000 workers over a six-week period to harvest and pick up the San Joaquin Valley’s sun-dried raisin crop.
Growers face a major challenge getting the crop harvested ahead of the Sept. 20 insurance deadline.
The record $1,900 price on the table almost pales in comparison to what Goto says is “serious talk” about the raisin price reaching $2,000 per ton.
“The RBA board of directors felt it important to make an offer that would be soundly justifiable and acceptable. Hopefully the 95-cents per pound price will keep more raisin-grape vineyards from being removed,” Goto said.