Today is
Friday May 18th , 2012
Three Points for PBA Prune Growers
August 29, 2011Point 1:
PBA is in price talks with packers. Shipment levels are up and inventory figures are more favorable than last year, however, packers say trade prices are poor in part because of expectation of a large crop in California. Please let me know how your crop is picking out so we can get factual information to counter speculation.
Point 2:
Don't pick too early. Maturity is behind last year and sugar is running 3 points lower. Sugar increases 2 points per week. If your sugar is 20% now and you wait two weeks to get to 24%, you could lose nearly half the crop on the ground and still be money ahead. The reason is that the dry away improves by 4 points and size count by 10 points with a 4 point increase in sugar — see tables.
Point 3:
Talk to your packer about delaying harvest and small prunes. For most growers prices on small fruit won't pay the cost of drying since dry–away tends to be high on small fruit. Adjust and monitor sizing screens on harvesters. Holding off picking makes better sugar, which makes better fruit and improves processing. Since price levels are soft in some markets, holding off picking to maximize returns with a chance of losing some fruit on the ground is better for growers and packers.
PBA is in price talks with packers. Shipment levels are up and inventory figures are more favorable than last year, however, packers say trade prices are poor in part because of expectation of a large crop in California. Please let me know how your crop is picking out so we can get factual information to counter speculation.
Point 2:
Don't pick too early. Maturity is behind last year and sugar is running 3 points lower. Sugar increases 2 points per week. If your sugar is 20% now and you wait two weeks to get to 24%, you could lose nearly half the crop on the ground and still be money ahead. The reason is that the dry away improves by 4 points and size count by 10 points with a 4 point increase in sugar — see tables.
Point 3:
Talk to your packer about delaying harvest and small prunes. For most growers prices on small fruit won't pay the cost of drying since dry–away tends to be high on small fruit. Adjust and monitor sizing screens on harvesters. Holding off picking makes better sugar, which makes better fruit and improves processing. Since price levels are soft in some markets, holding off picking to maximize returns with a chance of losing some fruit on the ground is better for growers and packers.
If you are a PBA member, please call or text me with your harvest reports, and if you would like more information on sugar and predicted dry away, average size, and net returns per acre. My number is
530-713-9909.
A spreadsheet with details and assumptions is available for PBA members from the PBA office.
| Relationship of Sugar to Dry–Away and Dry Size Count |
||
| % soluble solids |
Drying ratio |
Dried count/pound |
| 18 20 22 24 |
3.7 3.4 3.2 2.9 |
75 69 63 59 |
| Green count is 20 per pound | ||
| Net Gain per acre at various fruit drop levels: |
|||
| Harvest Start Point |
% drop |
Drop lbs/tree |
Net gain with fruit loss |
| 24 vs 22% Sugar |
0% 10% 20% 25% |
0 13 26 32 |
$630 $402 $174 $59 |
| % drop |
Drop lbs/tree |
Net gain with fruit loss |
|
| 24 vs 22% Sugar |
0% 10% 20% 25% 33% 45% 47% |
0 13 26 32 42 58 60 |
$1,077 $849 $620 $506 $323 $49 $4 |
A spreadsheet with details and assumptions is available for PBA members from the PBA office.
Prunes Don't Just Sell Themselves
Fourteen years ago, the California Prune Board and Prune Marketing Committee sent a letter to California prune growers outlining the seriousness of a world oversupply of prunes. The Board and Committee recommended some common sense actions for growers and our industry. These included devoting resources to protect our key markets, voluntary grower action to remove less efficient prune orchards, and to prune and thin to match production to demand. Read letter here.
In 1997 we realized that we had planted more acres than the market could support and our industry took steps to correct the imbalance. Today, producers in South America find themselves in similar circumstances without adequate resources to address the problem. Producers in Chile and Argentina have planted more acres than their markets can support and every producer in the world is feeling the negative impact of depressed prices and sluggish demand from buyers who wait to see if the next crop cycle will bring even greater excess and even further downward pressure on price levels. Fortunately, such overproduction is not sustainable and we are beginning to see signs of correction.
In 1997 we realized that we had planted more acres than the market could support and our industry took steps to correct the imbalance. Today, producers in South America find themselves in similar circumstances without adequate resources to address the problem. Producers in Chile and Argentina have planted more acres than their markets can support and every producer in the world is feeling the negative impact of depressed prices and sluggish demand from buyers who wait to see if the next crop cycle will bring even greater excess and even further downward pressure on price levels. Fortunately, such overproduction is not sustainable and we are beginning to see signs of correction.
Argentina in particular is experiencing what can go wrong when prune trees are planted based on wishful thinking or speculation without adequate investment in developing an industry infrastructure and market for the production. A recent article in the Los Andes points to the crippling effects of overproduction and the lack of resources to even finance the dehydration and processing of the crop, not to mention the resources needed to market and sell the crop. Read article here.
Much of the advice offered in 1997 to California growers applies today even though California is not driving the oversupply as it did 14 years ago. California prunes will remain in demand because of our consistent quality and food safety as long as we continue to meet and beat the competition, which means investment in improving production and processing efficiency, and our marketing efforts. But if we oversupply our existing market, margins will shrink and we may find ourselves in even more difficult circumstances. We need to take our own advice now, as we have in the past, and deliver a 2011 crop that matches what we can sell profitability.
Much of the advice offered in 1997 to California growers applies today even though California is not driving the oversupply as it did 14 years ago. California prunes will remain in demand because of our consistent quality and food safety as long as we continue to meet and beat the competition, which means investment in improving production and processing efficiency, and our marketing efforts. But if we oversupply our existing market, margins will shrink and we may find ourselves in even more difficult circumstances. We need to take our own advice now, as we have in the past, and deliver a 2011 crop that matches what we can sell profitability.