A strong U.S. dollar, increased foreign competition and a larger domestic crop are contributing to a price decline of nearly 10 percent for California’s 2015 raisin crop.
Raisin farmers will be receiving $1,600 a ton, down from the $1,775 a ton they received in 2014.
Although it took months for grower-representative the Raisin Bargaining Association and the industry’s packers to settle on a price, many were pleased with the outcome.
The RBA represents about one-third of the industry. Another one-third is represented by Sun-Maid Growers and the remaining one-third are independent growers. RBA officials say the organization’s negotiated price generally is viewed as the standard for the rest of the industry.
Richard Sahatjian, executive vice president of Victor Packing in Madera, said the lower price is necessary to help stabilize a sluggish export market. The industry exports about one-third of its crop.
“Unless the market starts picking up, the $1,600-a-ton price seems fair, especially based on current global demand and market conditions,” Sahatjian said.
The industry is anticipating a large 2015 crop once production is fully accounted for, and packers do not want to clog the market with a glut of raisins.
“We could move the entire crop and drop our prices, but that would bring down the whole market,” Sahatjian said.
Richard Nieto, who farms 40 acres of raisin grapes in the Sanger area, was hoping for $1,800 a ton, considering the number of growers is dwindling.
“I see 100 acres being pulled out over there and 80 acres being pulled out near that,” Nieto said. “And yet, they still want to pay us less.”
Some packers have taken issue with how growers will be paid. The agreement calls for packers to pay for 90 percent of the growers’ raisins, with several options for buying the remaining 10 percent.
The packer can pay the agreed upon field price of $1,600 a ton on or before May 15 or pay $1,650 a ton on or before Aug. 15. A packer also can pay the field price within 15 days of the raisins being delivered.
If the raisins are not purchased, they will be placed in storage and sold at the 2016 price.
Howard Sagaser, an attorney for Boghosian Raisin Packing in Fowler, said that while the Boghosians will pay the $1,600 a ton to RBA members, the company has not agreed to the requirement that non-RBA members, or independent growers, also set aside 10 percent of their raisins.
“The RBA is trying to impose on independent growers a contract that they didn’t agree to,” Sagaser said.
Sagaser said the company will offer its growers the option of selling 90 percent of its raisins with the 10 percent set aside, or paying for 100 percent for its raisins.
“The RBA negotiates for the best price for all the growers in the industry,” said Glen Goto, chief executive officer of the RBA. “We are trying to get the maximum return for all the growers, and we think this should be fair to all growers.”
In an advertisement placed in Sunday’s Fresno Bee, the RBA faulted some industry packers for trying to pay growers significantly less than the announced price and some independent growers have accepted it.
“The RBA negotiates every year to get the best price for the benefit of all California raisin growers,” the statement said. “Independent growers need to join the RBA to achieve sustainable pricing in the future.”