California grape volumes heading toward peak supplies

California grapes are in the early stages of San Joaquin Valley production and building steadily. “We’re not very far off from reaching peak supplies. We’re not quite there yet but it’s going to happen really fast. Supplies look really strong this year,” says Jim Beagle of Grapery, noting there’s a slightly later start to the season. The overall volume looks similar to last year.

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

The season is predicted to have steady supplies of good quality fruit from now until January. “The crop size appears to be very similar to last year which was a great year for supplies. The quality looks very good this year,” says Beagle. “We have a long ways to go and many things could happen. But a high-quality crop in a good crop year is important. It gives consumers a good experience so people keep buying more. There’s a lot of optimism.”

This growing production is meeting strong demand, though growers are mindful that the current economy is impacting consumer spending habits. “Though grapes are becoming more expensive, prices haven’t risen as fast or as far as other goods, which makes grapes affordable in a relative sense. With pricing and demand, consumers see the value in grapes. There’s a very strong equation there this year,” he says.

“Though grapes are becoming cheaper than other things in a relative sense.”  I wonder if that sentence can either be changed or eliminated.  A possible change could be something along the lines of “Though grapes are becoming more expensive, prices haven’t risen as fast or as far as other goods, which makes grapes affordable in a relative sense.”

Costs, logistics and more

Of course, inflated costs are hitting growers as well across many commodities. “We’re all conscientious about how we have sustainable business models so we can continue investing in things that consumers will want and that we’ll have a good livelihood,” he adds.

Another challenge is also the continued state of the supply chain. “Difficulties in ports around the world have limited our ability in recent seasons to export grapes as successfully as we’d like to so hopefully we’ll overcome that,” he says.

Drought also remains an issue for California growers in particular. Beagle is studying its water uses and looking at ideas such as water banking projects as it plans for the long term with the Sustainable Groundwater Management Act (SGMA) restrictions coming into place and limiting the amount of water being available for farms.

As for pricing, it’s strong right now. “We’re not at peak volumes yet. It’s going to be interesting to see what happens when we get to peak promotional volumes. I’d say pricing is strong and stronger than it’s been in recent years,” says Beagle.

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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