California's 5,000 raisin growers face sharp cuts in income in the wake of a heavy 2000 crop, plus more worries about anticipated tonnage from new wine grape acreage coming into production.

Jerry W. Stark, manager of the California Raisin Administrative Committee, the industry's federal marketing order, sketched the situation during the recent Agribusiness Management Conference in Fresno.

Although the field price for this year's crop is being negotiated between growers and packers, Stark estimated growers could expect to see, at best, $600 per ton.

That contrasts to the 100 percent free tonnage prices of $1,255 last year, $1,290 in 1998, and $925 in 1997.

Under this year's ideal growing conditions, the industry produced an estimated 427,000 tons of natural Thompson Seedless raisins, plus another estimated 100,000 tons of goldens, Zante currants, and other types.

Part of the swollen crop was due to growers laying Thompson Seedless for raisins instead of selling the grapes on the depressed grape concentrate market.

Normal production has been 350,000 tons, although El Nino weather in 1998 produced a short crop of 240,000 tons and the following season's La Nina conditions brought a crop of 300,000 tons.

Seventy percent of the California crop customarily goes to U.S. and Canadian channels, and the remainder is exported. Exports encounter tough competition from Iran and Turkey, which export 85 percent of their crops and are becoming stronger with not only higher yields but higher quality.

Stark, who also manages the California Raisin Marketing Board, the industry's promotional body, said the industry must meet the challenges of globalization and a shrinking marketplace.

He said that would have to be done by e-commerce, customizing packaging for clients, and new products with raisins in a world where home-baking and other traditional uses of the fruit have declined.

Future of industry The future of the raisin industry also will hinge on how the wine industry works out its problems of increased production. "If the non-bearing acreages of wine grapes does not move as product, it will have tremendous downward pressure on our Thompson Seedless growers," said Stark.

Even this year, he added, "our growers make their profits on green-tonnage sales and not on raisin sales."

Even so, Stark said the industry is moving to capitalize on ways to add raisins to prepared foods and to promote the health benefits associated with eating grapes.

Noting that five to 10 years is required to penetrate new export markets in Asia, Stark said Japan buys more than 30,000 tons of California raisins each year. "Ten years ago it wasn't even 10,000 tons, and we should be selling 40,000 tons."

Challenged too are California's table grape and stone fruit industries, according to another conference speaker, Bruce C. Burton, group vice president for deciduous operations, Dole Fresh Fruit Company, Bakersfield.

"We have fewer and fewer customers to sell to, and that has changed negatively the competitive dynamics of our business," he said.

Also of major concern are foreign competition for table grapes, farm labor questions, and the glassy winged sharpshooter.

White-flesh peaches and nectarines are changing the varietal mix of fresh fruit, and even as new varieties are sought for appearance and shipping suitability, there is renewed attention to flavor.

White-flesh varieties made up less than 2 percent of the peach and nectarine volume in 1995 and in 1999 accounted for 17 percent.

Planting in response to the Taiwan market, growers produced more than it can absorb and the domestic market needs time to absorb them. Burton said he also expects to see a sorting-out of acreage to get the best of the white-flesh varieties.

Stonefruit growers, Burton said, have moved into "higher sugars, better maturity and are experimenting with different conditioning techniques to make the fruit more flavorful."

Bearing acreage of grapes and tree fruit increased appreciably in the period from 1991 to 1999, with table grapes up 23 percent, peaches up 31 percent, and nectarines up 34 percent. Plum acreage declined 2 percent.

The mix of table grape varieties has shifted in the past decade. For example, Thompson Seedless was 42 percent of the crop in 1990 but is 28 percent of it now. In the same period, the Red Globe variety increased from 2 percent to 18 percent. Crimson Seedless is gaining in late-season popularity, while the once-prized Emperor is practically non-existent.

Mexican grapes Mexican table grapes, whose quality rivals that produced in the U.S., have spilled in quantity into traditional U.S. markets. Instead of the Coachella Valley season putting eight- to nine-million cartons on the early market, the Mexican industry adds 12 million cartons and the added volume pushes the price down below what Coachella growers can tolerate.

"The Chilean table grape industry, looking for new markets, is bringing fruit into U.S. markets later than before, so we've had to contend with competition from Chilean Red Globes," Burton said.

When importation of Chilean table grapes into the U.S. started in volume many years ago, they arrived prior to the California season and growers here considered them complementary and, in fact, a means of enhancing interest in the domestic grapes that followed.

Another challenge to grape and tree fruit growers is the shrinking client-base. In the period of 1977 to 1999, the consolidation of outlets meant that the top eight retailers account for half of grocery sales in the U.S.

For the fragmented, producer industry this means the client has greater leverage in pricing, packaging requirements, and promotional allowances.

Burton said about 70 percent of the cost structure of the industry is hand labor, either for harvesting or other production practices. Estimates are that from 20 to 50 percent of the farm labor force in California is illegal.

"U.S. immigration is taking a much stricter stand on enforcement, and that creates labor shortage problems. We have an antiquated immigration policy that is out of step with reality. We are now trying to get guest worker legislation through Congress."

The relationship of the problems, he said, "makes being a grower less than financially rewarding." California table grapes are being sold for roughly what they were sold for in 1990, despite hikes in growers' per-acre costs.

As indicated by larger crops and larger numbers of boxes per grape grower, there's been a degree of consolidation in the grower-shipper segment, although nothing to match the retail pattern.

In 1986 California table grape growers numbered 976, but by 1999 attrition had left 621, or 36 percent fewer. During the same period, average boxes per grower rose from 60,766 to 135,486, an increase of 123 percent.

The effect on stonefruit was more dramatic. In 1986 there were 2,200 growers, who dwindled to 1,000 by 1999, a loss of more than half. During the same period, average boxes per grower increased from 18,000 to more than 55,000, for a gain of more than 207 percent.

"These are pretty big structural changes for our industry," said Burton.