Raisin growers and packers stalled on price for crop

Across the central San Joaquin Valley, the annual raisin harvest is nearly complete. Skilled workers have picked and placed thousands of tons of green grapes on sheets of paper, waiting to be dried by the sun.

When ready, the wrinkly raisins will be hauled to processing plants where they will be cleaned, sorted and packaged for sale to food makers and foreign buyers.

It’s a ritual that plays out every year, but one that has become increasingly complicated by squabbles over price, declining acreage and disagreements over how best to sell the crop.

“We are in a difficult transitional phase and it is important for the industry to come together,” said Gerald Chooljian, president of Del Rey Packing Company. “If we don’t, this industry is going to die.”

Coming together is not going to be easy. Growers and packers have just begun the process for hashing out the price for this year’s crop. And so far, the two sides are far apart.

Both sides remain tight-lipped about the negotiations and will soon start a conciliation process overseen by the California Department of Food and Agriculture.

Last year, the growers negotiated a price of $1,600 a ton for their crop, but several packers have balked at paying that much for this year’s crop, saying the demand for raisins has softened.

Glen Goto, president of the Raisin Bargaining Association, a grower-led group, said the market may be sluggish, but it also has a tendency to fluctuate.

“We just need to calibrate the right price levels,” Goto said.

Goto and others expect the crop to be about 300,000 tons, a drop from last year’s 335,000 tons. In the future, that figure could drop even further, as more vineyards are removed to make way for higher-value crops like almonds.

This year, raisins were farmed on 175,000 acres.

“When I started with the RBA in 2002, we had 280,000,” Goto said. “That is what has happened to this industry.”

How many more acres will be removed remains to be seen. But at least one grower and packer says more needs to come out to achieve a better balance between supply and demand.

Troy Gillespie, president of River Ranch Raisins near Biola, said a strong U.S. dollar coupled with increased foreign competition have weakened demand for California raisins.

Nearly a dozen countries produce raisins and have slowly begun eating away at California’s share of the foreign market. The California industry exports about 30 percent of its crop annually.

“I feel for growers because right now California raisins can’t compete,” Gillespie said. “The world market doesn’t always care that we have one of the best products, they just care about the price.”

Gillespie and others see more acreage being removed and a hastened pace for mechanizing the labor-intensive harvest of grapes. Growers like Chooljian are also in line to plant a new grape variety that dries completely on the vine, without the need to cut the grape and dry it on paper trays.

“There is no question things are changing, and I believe that we will come out of this stronger,” Gillespie said. “But as growers and packers, our interests need to be aligned. We can’t be fighting all the time.”

This story was originally published September 23, 2016 at 3:08 PM with the headline "Raisin growers and packers stalled on price for crop."