03.25.14

Feds to buy $11.5M in Concord grape juice

Industry officials reacted favorably Monday to an announcement that the federal government will purchase grape juice to level out supply and demand.

“It’s certainly very good for the industry, both East and West,” said Mike Concienne, regional manager in Grandview for the National Grape Cooperative, which owns the Welch’s brand.

The U.S. Department of Agriculture will purchase $11.5 million worth of Concord grape juice to use in nutritional programs, such as school lunches, to remove surplus supplies, according to an announcement by the agency Monday.

Growers and companies such as Welch’s had appealed for help after two years of large crops in America’s Concord states — Washington, New York, Pennsylvania and Michigan — boosted supply and began to push down prices.

The nation produced an estimated 441,450 tons of juice in 2013, a 46 percent jump over 2012. Washington, the nation’s largest producer, contributed roughly 167,000 tons each of those years.

Though not records, those figures were high enough to cause a steep decline in prices. Washington’s cash price went from $280 per ton in 2012 to $225 per ton last year.

“You don’t want it to continue to go down,” said Trent Ball, a partner in Agri-Business Consultants, who presented facts and figures at the November Washington Grape Society annual meeting in Grandview.

At last year’s Washington cash price, $11.5 million would buy some 51,000 tons of juice, or roughly 12.8 million gallons.

The federal government also purchased grape juice to reduce surpluses in 2006 and several times in the 1980s and 1990s, said Democratic Sens. Patty Murray and Maria Cantwell in a letter last summer to Tom Vilsack, U.S. Department of Agriculture secretary.

Washington has about 21,400 acres of Concord juice grapes, with the vast majority in the Yakima Valley. More than 200 growers raise Concord grapes.

Like with any product, the tug and pull of supply and demand is cyclical. Just two years ago, demand was so high that processors turned to imports from Argentina, Brazil and Chile to top off inventories.