The East Coast had a large Concord crop this year.
Juice grape growers in Washington State, recently weathering some of the lowest cash prices in decades, are due for some good years. Those years should be on the way, forecasts agricultural economist Trent Ball, pointing to several positive signs—strong cash prices, controlled inventories, and recent removal of juice grape acreage.
The 2008 Washington juice grape harvest, despite an awkward growing season caused by weather, produced high quality fruit with high color and sugars. Ball, viticulture and enology instructor at Yakima Valley Community College, estimated that the 2008 crop would yield 187,000 tons, with a cash price of about $215 per ton. Tonnage in 2008 reflects a 30 percent decline from the previous year, due in part to the biennial bearing nature of Concord grapes. Cash prices are up from $180 per ton in 2007, and well above the $100 per ton received in 2005.
A significant trend Ball has noticed in the last 18 months is the removal of acreage. "Older Concord vineyards are being pulled out for alternative crops, primarily hops," he said during statewide juice and wine grape talks held in November.
The most recent acreage estimates put Washington’s Concords at 22,000 acres during the 2008 harvest, with Niagara grapes at 1,730 acres. "We’re seeing that from about 24,000 acres in 2007, there’s been almost a 10 percent decrease in Concord acreage," he said. About 200 acres of Niagara grapes also have been removed.
The last time Concord acreage dipped below 22,500 acres was in the early 1990s, according to statistics compiled by Dr. Raymond Folwell, retired agricultural economist from Washington State University. Historically, Concord acreage has been very stable, estimated to be between 24,000 to 25,000 acres.
While Washington producers harvested moderate crops, their fellow juice grape growers in New York, Pennsylvania, and Michigan produced large ones, estimated to total 272,575 tons. "The East Coast in general probably had their fourth or fifth largest crop in history," Ball said, noting that the national Concord crop is estimated to be 460,000 tons, down from the 2007 crop of 518,000 tons.
Cash prices for Concord grapes in Washington are usually about $20 to $25 less than the cash price on the East Coast, he said. But that trend has been slowly changing. Since 2005, when the price differential was dramatic—the cash price in Washington was at near record lows of $100 per ton, with East Coast at about $200 per ton—the difference between regions has been tightening. The 2008 cash price in New York was $225 per ton compared to Washington’s of $215, according to Ball.
"Cash prices ultimately translate into concentrate prices," he said, highlighting the recent anomaly of higher concentrate prices in Washington compared to the East. "Concord prices are always higher in the East," he said, adding that the difference typically represents freight and hauling costs involved in moving Washington product to the more populated East Coast.
"I talked to a few folks in the business, and in their 25-year history, they’ve never seen the Washington price higher than the eastern price—until 2007," Ball said. In 2007, Washington concentrate prices were about 50 cents per gallon higher than the East, while in 2008, the spread grew to about $1 per gallon. Washington concentrate is at $14 per gallon, with East Coast concentrate at $13 per gallon.
"Product is moving, which is a good sign," Ball said. Demand is strong for Concord juice, and consumption of single-strength Concord juice has improved slightly. In 2006, U.S. consumers drank .43 gallons per person; however, they drink about ten times that amount in orange juice and five times that in apple, he noted. "There is a market for Concord juice, and we’re seeing more advertising campaigns touting the health benefits of Concords."
Ball identified several positive signs as the industry goes into 2009, including low inventories of concentrate and continued removal of acreage. Some processors are sold out of inventory, he said, adding that inventories should remain controlled because there wasn’t a huge national crop in 2008.
Moreover, he predicted that cash prices will increase in the coming year.