Strong economy leads to early strong demand for California grapes

“It’s about half a week to a week normal. It’s not a huge swing for us,” says Jim Beagle of Grapery based in Shafter, CA. “It’s maybe the absence of really cool weather in the spring. Sometimes in late April or May we’ll get a cold snap and we didn’t this year.”

The crop itself is a large crop and Beagle says it’s high-quality and harvest has begun out of San Joaquin Valley, CA. “I think the industry is going to be about the same as last year but on a per acre basis, the yield looks to be as good as last year or possibly better,” says Beagle, adding that Grapery continues to add to its high-flavor varieties such as Cotton Candy and Gum Drops.

Volumes (in Kg) of table grapes from California in the US Market

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

Managing water concerns

The growing conditions are good, albeit dry given the drought the state is currently experiencing. “There is water for the crop. With the dryer weather it’s led to less disease pressure so there’s really clean fruit,” says Beagle. He notes that as far as water concerns, they are less of a concern for grapes. “If we had multiple years in a row with this low water, it’d be more of a concern. We’re going to spend more money pumping money from the underground than we’d like to. But grapes are a fairly water-efficient crop and take quite a bit less water than some of the tree and row crops grown around here. Citrus for example takes more water because they’re evergreens and use water year-round.”

What is more of a challenge are rising costs on a number of fronts. “There are concerns about the cost and availability of transportation to get crops to market. This counts for shipping overseas as well,” he adds. On top of that not only do labor costs continue to grow but other inputs as well.

What’s fueling demand

However meeting this large crop looks to be strong demand for California grapes.

“The economy is strong and people have money to spend whether it’s through work or higher wages or stimulus checks. The economy has opened up from the pandemic so there’s a lot of pent-up demand,” Beagle says. He notes while last year’s strength in demand came from the significant shift from foodservice outlets to grocery for produce–grocery is a stronger channel for grapes than foodservice–this year’s demand looks to be galvanized by the robust economy.

That leaves pricing that is also strong. “It appears strong to start and I’m optimistic that we’re going to have strong pricing because demand is up,” says Beagle.

Price (in USD) of table grapes from California in the US Market

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.

Access the original article with this (Link)