California prune industry tries to head off global glut

05/20/2009 07:18:01 AM
Don Schrack

The California Prune Bargaining Association, Yuba City, is urging grower-shippers to take steps now to avoid flooding the worldwide market when the state’s prunes are processed in the fall.

“We’re encouraging everyone to thin heavy crops,” said Greg Thompson, the association’s general manager. “We want to produce the volume of prunes the market needs, so that we can maintain price stability.”

The global recession has made it difficult for South American prune exporters to find buyers for that continent’s more than 110,000 tons of prunes, he said. Importers in major prune buying countries, such as Russia and Mexico, were unable to obtain financing, Thompson said, and the resulting surplus of prunes put downward pressure on pricing worldwide.

“That surplus could have an impact when our crop comes off in the fall, especially in our export business, which is now more than 40% of our volume,” he said.

The average annual volume for California prunes is 130,000 tons to 140,000 tons, Thompson said. The state’s volume dominated world production during the past century, but the growth of the South American prune industry has altered the global market, he said.

When supplies exceed demand, buyers seek the larger prunes, Thompson said. Thinning the California crop will reduce the production of smaller fruit, he said.

“Our goal is to focus production toward what we know we can sell,” Thompson said.

The timing of the recession and global surplus is unfortunate for California grower-shippers. Unusually small crops in 2004 and 2005 cost California grower-shippers market share, Thompson said. The state’s consistent quality and food safety programs helped recapture some of those shares since 2005, he said.

In recent years, research has found prunes provide a variety of health benefits, which Thompson said is a positive for the industry.

“People are still interested in eating healthy even though times are tough,” he said.

Sales of prunes at European discount stores reflect the health mindset among shoppers even in the face of the recession.

“About 60% of prunes sold in Germany are sold in discount stores,” Thompson said. “Those stores are looking for sales of prunes to hold steady or even improve this year.”



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