Allied Grape Growers, 2015. All rights reserved. Welcome to: Allied Grape Growers’ Thompson...

Allied Grape Growers, 2015. All rights reserved.

Welcome to:

Allied Grape Growers’Thompson Seedless/Fiesta

Grower Meeting

March 20, 2015


Sections

• Nat DiBuduo• Introduction & Setting the Stage

• Jeff Bitter• Market Updates/Data/Trends

• Karl Lehman• Dehydrator Considerations• Crop/Field Update

• Emilio Miranda• Considerations for Raisins

• Questions and Discussion


This is amarket update meeting.

It is NOTa meeting to tell

our membersthey have to

make raisins in 2015.


Today’s Position

At this point, crop size unknown, the marketplace for Thompson Seedless

is a long way from forming.

But, we can look at some of the dynamics which drive the market to

ascertain whether or not the direction is positive, the same or

negative from last season.


AGG’s Role in Marketing Your TS Crop

• To seek out all viable alternatives that allow our growers to maximize their return• AGG is certainly not limited to

marketing to crush facilities.• To accurately communicate market

conditions and keep growers informed• To work with all potential buyers to

identify growers that may be a good fit for “alternative” programs like packing for juice grapes or going to dehydrator


Your Role in Working with AGG

• To be flexible with regard to whom your grapes may be sold to

• To stay informed of the market and understand the opportunities/challenges

• To grow a clean crop (mildew and rot free) in order for AGG to maximize our sales potential

• To consider all alternatives viable, including making raisins if needed

• To stay positive and focus on opportunities instead of talking pricing and markets down


What are the buyer’s saying?

“Our tanks are full.”“Our value-segment sales are off.”“Imports are cheap and available.”“We planted to our future supply

needs.”“Argentina is selling cheap to generate

cash.”“Australia is over-producing.”

“Our (below $5) products are foreign now.”

“We want to move up the price ladder.”

These are not just “sayings”, they are evidenced with data and fact.


There is currently no guarantee of any low sugar program this

year. Thompson use for brandy will be extremely minimal, and the sparkling wine program at

Mission Bell may use alternative varieties.


Raisin Variety Uses• Raisins• Sun-dried in field• Dehydrator (specifically Goldens)• Selling green to a person or entity that

buys on the vine and dries in the field at their risk

• Wine• Dry White• Sparkling

• Brandy or Distillation/Alcohol• Concentrate• Table & Cannery – N/A


Cannery20,000 1.3%

Dehydrator96,000 6.1%

Table/Fresh48,000 3.1%

Natural Raisin1,250,000

79.7%

Concentrate120,000 7.6%

Brandy10,000 0.6%

Wine (Inc. Sparkling)

25,000 1.6%

2014 Estimated Raisin Variety Utilization

Total raisin variety fresh tonnage estimate of 1,569,000 tons


2014-2015 Shipments: (First six months from August 1)◦ Domestic shipments are up about 1%.◦ Export shipments (price sensitive) are down about 20%.◦ Total shipments down 8%.◦ Based on the current shipment rate, we could ship around

320,000 tons for the 2014-15 marketing season.2014-2015 Deliveries:

◦ Natural Seedless raisin deliveries by growers to handlers are currently at about 275,000 tons.

◦ This could still increase but is not anticipated to exceed 300,000 tons at this point in the year.

Inventories:◦ We will likely enter the 2015-2016 raisin season with a

slightly depleted carry-in from last year’s 140,000 tons, which should serve to balance packer inventory a bit.

Raisin Market


$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

$500.00

Green Price Green Return Comparison for Raisins vs. Crush

Raisin price (Equivalent green) Average crush price

$11 $32$50

Analysis does not consider time value of money or raisin production costs

$67

$93

$44$97 $64

$94$12

$140

$97

$128

$106 $177


Going green into the raisin market◦ A good alternative for those not wanting to make raisins◦ Demand from this segment of the raisin industry is

currently good◦ For dehydrators, natural gas prices have been softening

since January 2014 making dehydrating a more attractive option

◦ There is likely margin and opportunity for those that want to take the risk of buying green grapes and making raisins.

Dehydrator/Sell Green OTV


0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2006 2007 2008 2009 2010 2011 2012 2013 2014

106.8 107.2113.2

117.0 118.1123.9 122.8

118.0 115.6

Cases(in Millions)

Est. California Table Wine Volume <$7/Bottle, 2006-2014

Data Source: Gomberg Fredrikson Report

Crush


Crush

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

2012 2013 2014

Segment Allocation of Winegrape Vines Sold, 2012-2014

HighMidValue

24 Million

30 Million

27 Million

Higheremphasis

in NorthernInterior

Majorconcentrationin Northern

Interior


-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thompson Seedless Crush, 2004-2014Crush


Crush


Crush

“The Argentinian wine industry is facing its biggest challenge in decades, as falling exports, rising inflation, tightened credit and a poor exchange rate combine to endanger the livelihood of many in the industry, especially those at the cheaper end of the market.”


Crush


• White Concentrate:• Market is currently uneconomical for California

growers• California grape $6-7/gallon• Competition is $5.50, and volumes are plentiful

• Argentina• Making inventory to avoid wine excess• Selling cheap and fast to generate cash

• Apple surpluses exist, negatively impacting the market

• Health “news” encourages folks to avoid “sugary drinks”

Concentrate Market


“Replacing cookies and juice with fruits and vegetables………are achievements worth celebrating”, Obama said.


Dehydrator Considerations• Defect-FREE!

• Almost all grapes purchased by dehydrators are made into golden raisins, which have to be cosmetically sound (i.e. NO mildew and clean from rot, insects, etc.)

• Size matters• Consider a thinning/sizing spray to create loser clusters with slightly

enlarged berries• “High” sugar

• The more sugar going in, the less work/energy to make a quality raisin.• Plan on picking at 21 brix or higher

• Scheduling & Logistics• Many dehydrators drive their equipment from field to field rather than

hauling it.• You will be part of a “line-up” of growers where crews will be moved to.• Dehydrators often harvest grapes into October• Yard/Road-side space will be needed for unloading/loading bins

• Hand picked• There may be a viticultural benefit to having the field hand harvested• Keep berms clean of noxious weeds• Control leaf hoppersPlease let us know if you are interested in going to dehydrator


Low Yield Avg. Yield High YieldBunch @ Factor: @ Factor @ Factor:Count 0.2157 0.2728 0.3159

20 4.31 5.46 6.3222 4.75 6.00 6.9524 5.18 6.55 7.5826 5.61 7.09 8.2128 6.04 7.64 8.8530 6.47 8.18 9.4832 6.90 8.73 10.1134 7.33 9.28 10.7436 7.77 9.82 11.3738 8.20 10.37 12.0040 8.63 10.91 12.6442 9.06 11.46 13.2744 9.49 12.00 13.90

2015 Crop Potential

Multi-year Average


Don’t limit yourself-

Be prepared to make raisins if it becomes a

market or financial necessity


Considerations for making Raisins

• Row centers must be disked fluffy (and free of weeds and weed clumps) in preparation for terracing or continuous tray laying.

• Shut off water in late July or early August, allowing soil to dry. (Brix will likely be 18-19)

• More sugar the better at harvest - 21 or more to guarantee quality.• At 21 Brix the drying ratio is 4/1 to 4.5/1. Can have poor quality below 18

brix.• Harvesting a traditional trellised Thompson or Fiesta vineyards may be by

machine on a continuous tray or by hand on trays. • Discuss raisin insurance with your crop insurance agent well before harvest.

Deadline is July 31 to sign up for insurance.• Raisin and reconditioning insurance are different from each other and

different from multi-peril crop insurance .• Timing: Higher sugar is required, and fruit is exposed on the ground for 2 to 3

weeks, depending on weather. Must harvest crop prior to insurance deadline (September 20 – hand, or September 25 - machine).

• May need additional equipment. (terracer, forklift, etc.)• Start early in contacting or getting to know harvesters and/or labor contractors.• Start early in contacting or getting to know your paper (tray) source.• Contact AGG regarding introductions to raisin packers if you currently do not

have an established relationship.


This is amarket update meeting.

It is NOTa meeting to tell

our membersthey have to

make raisins in 2015.


Questions and Discussion

Allied Grape Growers, 2015. All rights reserved. Welcome to: Allied Grape Growers’ Thompson...

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Transcript of Allied Grape Growers, 2015. All rights reserved. Welcome to: Allied Grape Growers’ Thompson...