The outlook for table grapes in California is dire. “While some producers were hit harder than others by losses due to Hurricane Hilary, there is not a single producer in the San Joaquin Valley that was not affected,” says Ira Greenstein of Direct Source Marketing. “Perhaps a very small percentage of the fruit was saved, but that is not enough to make a difference.” The loss is likely to be significantly higher than the 25 million cases originally planned. “There will be companies that will not survive,” laments Greenstein. Due to the losses, the price of table grapes has increased from $18/box to $34/box in the last three weeks.
High labor costs
“Prices have to be high so that producers can cover losses,” says Greenstein. “You put in two to three times more work cleaning the fruit. They look at the grapes, identify bad fruit, clean the grapes, etc. Harvesting and packaging takes two to three times as long,” he adds. The combination of high labor costs and low quantities of packable fruit has resulted in a change in the equilibrium price, which increased from $20/carton to $30/carton. Despite the great cleaning effort, the shelf life is affected and there is still the possibility that the fruit will be sorted out. For this reason, some producers have decided to abandon their plots entirely.
It is estimated that between 35% and 40% of the crop has been lost, so the natural reaction is for prices to rise. “However, it is a difficult process because the Retailer You already have marketing plans. “Traditionally, September and October are the best months for promotions as this is when both production and quality peak,” says Greenstein. Retailer They range from 18 to 22 dollars FOB, but the manufacturers cannot comply with them and declare force majeure. “To stay cared for, Retailer “As a result, the $1.99/pound (454g) promotions will disappear and will be replaced with daily retail prices of $2.99 and $3.99.”
At this point the consumer must decide whether they want to pay that much for the grapes. “It will take a month of higher prices to see how consumers respond,” Greenstein says. “This is completely new territory. I have been in the business for 35 years and have never seen such a devastating grape season in California. We see cash sales in excess of $34.95. “Although red grapes are more affected than white ones,” I said, “I have never sold them at this price in September.” In a few weeks it will be known whether consumers continue to buy grapes or opt for other products such as apples, citrus fruits or strawberries.