Grapes in Demand: Wine and raisin growers fighting for crop share
10/01/2011 12:00 AM
10/01/2011 12:35 AM
FRESNO — San Joaquin Valley grape growers are in the midst of a rare price war this season.
Wineries, thirsty for white grapes, are paying the most ever for Thompson grapes.
And raisin packers, responding to growing consumer demand, have upped the ante with the highest price ever paid for Thompsons — the premium grape for making raisins.
The two sides of the market have caused demand for Thompsons to nearly double.
The price boost is a good thing for raisin growers, who say they've faced unusually high costs this year. They fought a wet growing season with more fungicide, spent more on fuel and paid more for scarce workers.
"Even though our costs have gone up, there is a feeling of goodness about the prices," said Harvey Singh, a grower for 40 years who farms 700 acres of raisins in Fowler, Selma and Kingsburg. "And once we get everything dried and in the barn before it rains, then we will feel a lot better."
The north valley is not a major raisin producer, but demand from Fresno packers can raise the price of Thompsons used by major wineries in Modesto. This variety is just one of many that go into wines.
Recently, at least two of the raisin industry's 13 packers increased the minimum per-ton price for raisins from $1,500 to a record $1,700. Prices for raisins have hovered above $1,000 a ton for several years.
All of the region's major wineries bumped their July per-ton price $15 to $265. Wineries generally have paid $155 to $210 a ton in the past several years.
The difference between raisin and wine grape prices reflects the weight of the grape. It takes many more dried raisin grapes to make a ton.
This year, valley counties shattered crop value rec- ords and grapes were a big part of the surge.
In Fresno County, for instance, grapes once again were the top crop in 2010. Valleywide, grapes rank only behind milk and nuts in terms of total crop value.
The Fresno area has a long history of raisin-making, but in the past two years has sent more grapes to the state's wineries, which routinely use Thompsons to make juice concentrate, brandy and value-priced wines — growing segments of the market.
This year, demand for Thompson grapes is expected to swell to about 450,000 to 500,000 tons, up from 273,000 in 2010, said Nat DiBuduo, president of the Fresno-based Allied Grape Growers, a farmers' cooperative.
At the same time, demand for raisins has been steady domestically and in foreign markets. And packers don't want to run short of supply.
There are many reasons for raisin growers to shift gears and send more grapes to wineries. Some had trouble finding enough workers to pick their raisin grapes.
A cool, wet spring caused many crops to get off to a late start, resulting in a compressed growing season.
Many growers could only find half the workers needed. On average, raisin farmers paid more than 30 cents per tray, 3 to 4 cents more than in 2010.
Others missed the Sept. 20 deadline to qualify for insurance, in part because they couldn't get enough workers. They didn't want to risk being rained on and sent the grapes to the winery.
For Madera farmer Dave Loquaci, the wineries' offers were too enticing. He said about half of his raisin grapes will go to wineries.
"We are still making a bunch of raisins; we just wanted to hedge our bets a little," Loquaci said. "And we were lucky to have that higher price from the wineries. It would be good to have that every year."
Also feeling lucky is Ray Jacobsen of J&L Vineyards in Easton. The Jacobsens grow several varieties of wine and table grapes. And he and others can still recall Thompson seedless grapes selling for $65 a ton in 2001.
"There is no question this is the highest we have ever seen, and this benefits us all," Jacobsen said.
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