The Raisin Bargaining Association (RBA) based at Fresno, Calif. celebrates its 50th anniversary on Dec. 9 – a half century spent representing the interests of its dried grape grower members. The group will celebrate this monumental achievement at its annual membership meeting in March.
The first 50 years have been full of challenges, says Glen Goto who has served as RBA’s chief executive officer (CEO) since 2002 - 14 years.
“Every year is a new challenge. There’s always a different issue,” says Goto. At his side at the RBA includes grower representative Steve Spate, featured in a Western Farm Press grower feature article in its October 6, 2014 issue.
Sitting atop the RBA’s priority list has consistently been negotiating the field price for RBA members’ grapes during price negotiations with 13 signatory packers. It can be a stressful process for both sides since each seeks its best price, respectively.
For the 2015 California raisin crop, RBA and packers agreed on a $1,600 per ton grower field price. At press time, the RBA was still negotiating the price for 2016 dried grapes.
Goto explains, “No two crops are the same and no two sales years are the same.”
About one-third of California’s 3,000 raisin growers are RBA members. The balance includes independent growers, and members of the Sun-Maid Growers of California cooperative based in Kingsburg.
Historically, the grower raisin price gained by the RBA is considered the price for the entire industry so RBA’s negotiations are critical for all growers.
Grape juice in the veins
Goto was born and raised on his family’s vineyard operation in Madera, Calif. He was the youngest of four brothers who all graduated from college. Glen earned a business degree in accounting at Humboldt State University.
He was the only son who came back to the farm after college, and asked his father Masayoshi and mother Mihoko if they needed help. The obvious answer was yes.
“I jumped in and started working with my dad when he was in his 60s,” Glen reflects. In 1980, he and his wife Janet, a registered nurse, purchased the ranch and took it over.
Prior to buying the farm, Glen joined the RBA where his dad had been a long-time member. Glen became involved in the political end of the raisin business. He ran for a position with the Raisin Administrative Committee representing the RBA and won the seat representing the Madera area.
Goto later ran for the RBA Board of Directors, snagging a seat representing Madera. As he gained experience, Goto accepted the association’s Secretary position and then advanced as the RBA’s President.
In 2002, Goto took the RBA helm as CEO. He sold his vineyard three years ago.
Raisin industry challenges
One of the largest challenges the RBA and the raisin industry face today is crop diversification, says Goto. Raisin growers are removing vineyards to plant almonds and citrus for their improved income potential.
“Almonds have been a success story over the last several years,” says Goto. “The agricultural industry has also had success stories with seedless Mandarin citrus. Olives also have been somewhat lucrative for growers.”
In 2002, California raisins were grown on about 280,000 acres, according to the National Agricultural Statistics Service in Sacramento. Today, it’s fallen to roughly 165,000 acres – about a 40 percent acreage decline.
The biggest challenge is reaching an agreeable field price between RBA growers and packers. Typically, negotiations result in a single field raisin price accepted by all 13 packers.
“It’s getting more and more difficult (to reach agreement) due to the financial pressures placed on processors and growers by lending institutions,” Goto says. “Everybody’s situation is different so it’s hard to put together a price that works for the whole industry. Last year, we ended up with two agreements with our processors.”
RBA-packer negotiations typically start from late spring to early fall once the industry get can get a handle on the actual crop size and price it correctly. The goal is to agree on a price by year’s end yet the 2015 crop price wasn’t reached until March of this year.
The negotiated 2015 field price was $1,600 per ton. At press time, RBA was still negotiating for the 2016 crop. RBA’s announced field price is negotiated by the group’s board of directors – all raisin growers.
This year, state-mandated conciliation where a facilitator helps all sides to reach an agreement was exercised. Conciliation is similar to arbitration yet it’s non-binding and mandated through the State of California. There was no priced agreed during the conciliation.
Another challenge is that shrinking state raisin acreage which means California is becoming a smaller percentage of the world’s raisin production. While the Golden State was once the largest raisin grower in the world, California and Turkey now fight for the annual global production title, depending on their respective crop size.
Combined, the two raisin-producing countries produce 60 to 70 percent of the world’s raisin production. Acreage is on the increase in Iran, China, Argentina, Chile, and Uzbekistan.
Goto says the decision to lift economic sanctions on Iran created another source of raisins for some export markets where California competes.
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With today’s supply of California-grown raisins, the economic survival of many raisin growers lies in either raisin vineyard removal to plant other crops or accelerated raisin mechanization to lower production costs.
Spate says, “To remain financially viable, raisin growers either have to diversify or mechanize – one of these two choices. Many of them are choosing to diversify and remove vineyards. Others are increasingly shifting to mechanized grape harvests to move away from labor issues.”
According to a survey by the National Agricultural Statistics Service, more than 50 percent of the 2015 dried raisin crop was still hand harvested. Despite the report, Spate’s travels through ‘raisin country’ reveal growing evidence that more traditionally handpicked vineyards are now cutting canes for ‘continuous tray’ harvest (mechanization).
“I believe the percentage of the crop that’s mechanized will continue to increase,” Spate says. “Just by talking with growers about the labor issue many more growers are talking about the need to convert to mechanization, at least at harvest time. You’ll never get everyone to do that but it will increase.”
Spate believes the slow shift from handpicking to mechanization is tied to grower perception of a “cost to the vineyard” issue. Mechanical harvest involves cutting canes at a critical time for the vine. Some growers believe cutting canes can remove fruitwood for next year’s crop which in turn could lower next year’s yield.
Spate, a raisin grower, disagrees.
“There are growers who do a very good job of continuous tray harvest that don’t see those yield reductions - in fact they have consistent production. A grower can be successful with mechanization at harvest and get the job done without hurting their vineyard.”
The California raisin industry currently produces from 270,000 to 340,000 tons per year. About 200,000 tons are sold domestically with most of the balance exported.
Japan and the United Kingdom are the largest export buyers of California raisins. Of all of the raisins purchased by consumers in Japan, California has maintained an amazing 85 percent market share for more than 50 years.