Vineyards close as prices fail to offset outputs - The Packer

Vineyards close as prices fail to offset outputs

01/15/2010 02:30:46 PM
Abraham Mahshie

Alcaino said vineyards that produced 1,500-1,800 boxes per hectare are insufficient, and a high production in the area of 2,500 boxes per hectare is necessary to survive.

“We expect the thompson seedless price not to drop as heavily as it did last year and the years before … because there is a shortage and it is the preferred variety in the United States.”

Omar Abu-Ghazaleh, imports manager for Pacific Trellis Fruit LLC, Reedley, Calif., said the southern Chile deal is seeing more casualties because of prices in the $12-14/ box range in February, March and April.

“Growers need about $16 to break even,” he said, noting that Pacific Trellis also owns ranches in Chile that grow grapes.

Brian Schiro, grape category manager for Jac Vandenberg Inc., Yonkers, N.Y., agreed that a price range of about $16-20 per box is “the best of both worlds” because growers are profitable while still enabling a promotable price to retailers.

“Everybody expects it to be there. It will probably be there by end of January, early February,” he said.

Abu-Ghazaleh predicted that the market would continue to be snug in the north because of smaller sizes overall in the industry and some growers packing less than anticipated. He also said that a spike in prices for the southern deal is unlikely.

Chilean grape suppliers are expecting some production costs to be slightly more amenable this year thanks in part to a drop in petroleum prices.

“Transportation has come down because gas has come down. Packaging hasn’t come down much,” said Anthony Stetson, vice president of sales for Pandol Bros. Inc., Delano, Calif. “Things are going up, but less last year.”

Abu-Ghazaleh agreed that costs are down by about 10% this year, although labor is up slightly.

“We need to have our retail customers promoting fruit instead of afraid to promote because of these high prices,” he said. “The current situation of the high pricing is concerning because our job is to move fruit as soon as the volumes come in, and they will start coming in.”

Tom Tjerandsen, marketing manager for the Chilean Fresh Fruit Association, Sonoma, Calif., said suppliers are also expecting for the Chilean season to continue beyond the agreed-upon last arrival date of April 10 as determined by Chile and the U.S.

“All grapes that arrived after April 10 had to qualify as U.S. No. 1 or better, and Chile did successfully manage to ship a substantial volume of grapes into the U.S. after April 10 because they all easily qualified for that designation,” he said, noting that arrivals continued into May last year.


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