August 21st, 2014
Thompson seedless grape market unsettled: Glut in wine might push some growers to raisins
BY ROBERT RODRIGUEZ
The Fresno BeeAugust 15, 2014
Two years ago, growers of the versatile Thompson seedless grape were being wooed by the raisin and wine industries as competition for their fruit pushed prices to record highs.
But factors have changed this year and wine grape buyers expect prices to tumble. How far remains to be seen. Some say the $325 a ton many central San Joaquin Valley farmers received in 2012 from wineries is not likely to be repeated.
"There is little activity to almost no activity from wineries that are traditionally buying grapes this time of year," said Nat DiBuduo, president of the Fresno-based Allied Grape Growers. "They are just not out there."
DiBuduo and others say a rise in imported bulk wine, competition from other beverages and healthy inventories of wine have weakened demand for Valley raisin grapes.
In good years, the raisin grape varieties grown in the Valley are used to make juice concentrate, brandy or kosher wine.
But back-to-back bumper crops have filled the tanks at the wineries.
"We are at the point where we are facing capacity issues," DiBuduo said. "It's like: There is no room at the inn."
Also working against California grape growers are bulk wine imports from Australia, Argentina and Spain.
Winemakers also are facing tougher competition from the growing craft beer, hard cider and distilled spirits industries, said Erica Moyer, partner/broker at Turrentine Brokerage in Novato.
"There is no question this is going to be a challenging year," Moyer said.
Several farmers say that with seemingly little interest from the wineries, making raisins may be a better option.
"This year, I am seriously considering it," said Paul Lanfranco, a Kerman-area grape grower.
"It would be nice to compare what the wineries are paying but at some point I am going to have to make a decision."
Lanfranco, who has about 400 acres of raisin variety grapes, has talked with one packer who said the price may fall in the range of $1,700 to $1,800 a ton.
The actual raisin price still is being negotiated between the industry's packers and the growers representative, the Raisin Bargaining Association.
Glen Goto, chief executive officer of the association, is optimistic about this year's crop and price. Last year, California raisin farmers produced a bumper crop and the industry packers still managed to increase sales by 18% over the previous year.
This year, poor weather and the drought have contributed to a smaller crop.
The U.S. Department of Agriculture estimates this year's raisin crop will be 13% smaller.
"Even though there is still some question about how many acres will go to make raisins or go to the wineries, I am still very optimistic we can move the volume because of what we did last year," Goto said.
Goto would like to see at least the same price growers received last year: $1,650.
They achieved a record price in 2012 at $1,900.
"We would like to start at $1,650 and go from there," Goto said.
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