Though higher than last year’s price by $125 per ton, California raisin growers won’t necessarily make more money than they did last year because of significantly reduced yields.
The Raisin Bargaining Association struck a deal with its 12 signatory packers at $1,775 per ton for the 2014 Natural Seedless field price. The announcement comes after RBA initially proposed a sliding scale price of $1,750 per ton to $1,950 per ton based on yield.
Included in the base price of $1,582 per ton is an $80 moisture assessment, $50 maturity assessment, container rental of $21, a minimum transportation fee of $15, an RAC assessment of $14 and a USDA inspection of $13.
The 12 signatory raisin packers under the RBA agreement are: American Raisin Packers, Boghosian Raisin Packing Company, Caruthers Raisin Packing Company, Central California Packing Company, Chooljian Brothers Packing Company, Del Rey Packing Company, Fresno Cooperative Raisin Growers, Lion Raisins, National Raisin Company, Sun-Maid Growers of California, Sun Valley Raisins, and Victor Packing Company.
Growers will be paid in three installments as they were last year. An initial payment of 65 percent is due 15 days after completion of delivery or the release of delivered tonnage from Memorandum Storage.
A second payment of 20 percent is due on or before Feb. 28, 2015 with the final payment due on or before April 30, 2015. Packers may pay their RBA growers in fewer payments with a shorter schedule if they desire.
Grower yields were down 10-40 percent this season, according to RBA Chief Executive Officer Glen Goto.
Drought and fewer acres factored heavily in this reduction.
At the end of the day the higher price will not make up for the lost yields in total revenue to growers, Goto said.
General agreement among the industry suggests that this year’s Natural Seedless raisin crop will be less than 300,000 tons. This is at least 65,000 tons shorter than last year’s crop. Goto praised raisin packers for selling and shipping last year’s entire crop.
“The increase in this year’s price was a significant compromise taking into full consideration Turkey’s unusually large crop, which caused their sultana price to fall,” Goto said.
Packers are reporting challenging marketing conditions as they attempt to sell California raisin into parts of Europe where sultanas control significant market share.
“The RBA is giving the industry a crop-clearing price because sultana berries are very small and will not work for a large percentage of loyal California raisin customers who specify larger berries, stricter growing and specification requirements, longer shelf-life and superior flavor,” Goto continued.
Further exacerbating California raisin grower returns are challenges related to the costs of water and labor. The increased cost of regulations in California also weighs heavily on producing a profitable crop.
According to Goto, California has seen a 2-3 percent annual reduction in raisin-grape acreage over the past decade, which is accelerating as more profitable crops like tree nuts continue to be planted.