Glut of Grapes Threatens to Dry Up Raisin Business

Each late summer day, Paul Khasigian puts on his farmer’s boots and heads down the crooked rows of his family’s 100-year-old vineyard. Sinking in the powdery soil, he pops a Thompson seedless grape into his mouth and lets his tongue tell him if it’s time to make raisins.

But this season of harvest has left another footprint in the grape fields of the San Joaquin Valley. Tractors are leveling vineyards in the prime of their production; entire fields 30 and 40 years old are wiped clean in a single day.

This town and so many like it along a 75-mile stretch of California 99, the nation’s raisin capital, are choking on surplus Thompson grapes.

Vineyards have been given over to weeds and bugs because the cost of farming is more than the price of raisins. Packinghouses have been mothballed, and the local raisin association, hoping to correct the glut, is paying growers to prune off the canes that make fruit.

Banks that have propped up the $400-million-a-year industry now sit coiled to lower the boom on overdue notes.

Nothing, though, hits the 42-year-old Khasigian harder than the roar of the giant tractors swallowing vineyards with their grapes still hanging in fat bunches, full of the sugar that makes these raisins the world’s best.

When the day is done, the tractors stack roots, trellis wires, stakes and abandoned fruit in huge piles, ready to burn.

No one knows how many acres of Thompsons, the king grape of this flat valley, have been plowed under since the raisin went bust two seasons ago. But it isn’t hard to find entire sections of old grape land now sitting vacant, concrete irrigation valves marking each vanished row like gravestones.

“I know we farmers are always whining, and people in the city don’t know when to believe us. But believe this: We’re dying,” said Khasigian, who is farming the same land his father and grandfather farmed.

“The talk here isn’t how much money we can make, but how little money we can lose. No one knows where we’re going.”

Too many raisins made and not enough raisins eaten--it’s a story as old as the first musings of author William Saroyan, the Fresno native who once answered the farmer’s lament with a simple equation: If only every mother in China placed one raisin in her pot of rice, he calculated, the glut would forever be gone.

The raisin marketers, it seems, have tried everything short of that to sell the world on the virtues of the sunbaked Thompson. From the Sun-Maid girl in her bonnet to the dancing clay figures of TV’s California Raisins to the marketing of raisin butter, the push for new converts has never ceased.

“How do we get America to eat more raisins?” asked Eddie Nikssarian, half smiling. The third-generation raisin farmer has torn out his 20 acres of Thompsons because he would lose less money making payments on fallow land. He supports his family by selling the very grape plants that have gotten the farmers into this mess. “There’s only so many raisins that can go into Raisin Bran,” he says.

For Armenian American families like the Khasigians and the Nikssarians who built the raisin industry here, the Thompson grape had been a wonder. It gave them three options at harvest: size up the berries and sell them as table grapes; yank off the bunches and haul them to the winery; or lay the bunches on trays and let them cook in the sun. (It takes only three weeks of San Joaquin Valley sun to bake a grape into a raisin.)

For the better part of a century, it was the raisin that gave the grape grower the steadiest payday.

Harry Rustigian, who still farms the land his father first worked in 1913, raised three children and built a nice brick house by turning grapes into raisins. In the good years--and there were plenty of them--he put away $30,000 at each harvest’s end.

Then two years ago, after the price of raisins dropped from $1,425 a ton to $878, he had to dip into his savings to pay his pickers and pesticide man. Last year, after he received only $554 a ton--$250 below the break-even point--Rustigian had to do the unthinkable: He laid off his oldest son, Dennis, the only one who had followed him into farming.

Now Rustigian, pushing 81, is driving his tractor by himself and watching over the irrigation system. “This is as bad as the Depression time,” he said. “There’s no promise here.”

He blames imported raisins from Turkey, the land his father fled more than 85 years ago at the outbreak of the Armenian genocide, for creating the oversupply.

“My family left the old country to escape the Turks,” he said. “We Armenians came to America and built this raisin industry from scratch. Now I’m an old man, and the raisin from Turkey is chasing me out. It’s crazy.”

The Turkish raisin, which now accounts for 25% of the world’s supply, has surely made matters worse. But packers and other farmers say the seeds of this recent glut were actually sown five and 10 years ago--right here in California.

Since 1993, more than 265,000 acres of wine grapes and table grapes have been planted throughout the state, a boom that has nearly doubled grape production. Because so many other varieties are now being used to make wine and table grapes, the elegant amber-green Thompson is no longer prized as an eating grape or a grape to blend into wine.

With nowhere else to go, at least nowhere else that pays much money, most of the 250,000 acres of Thompson grapes get turned into raisins. Of the 377,000 tons of the dried berry produced in California last year, 37% went unsold and had to be stored in warehouses.

“The abundance of wine grapes is taking a large bite out of the Thompson market,” said Gary Nelson, a state agricultural statistician.

The Thompson grape’s fortunes have sunk so far so fast that the Gallo winery told farmers that it would be offering only $65 a wet ton for Thompsons headed to the juice tanks.

The price, down from $200 a ton only a few years ago, is considered such an insult that 75 farmers gathered recently outside the giant E&J; Gallo plant in Fresno to protest.

“I’ll be losing $300 an acre with the price Gallo is offering,” said Avtar Gill, a Sikh grower who attended the rally. “It only means that the Thompsons that used to go to wine will now go to raisins. The raisin glut is only going to get worse.”

Gallo blames the oversupply of wine grapes for the low prices. “We sympathize with the plight of all California grape growers, but the problem is really beyond our control,” said Milo Shelly, Gallo’s vice president.

The glut has suppressed land prices to the point that 40 acres of Thompson land now sells for nearly the same as 40 acres of empty land. A few years ago, farmers were getting $9,000 an acre for prime Thompson land. Today, they’re lucky to get $5,000.

“I’ve been selling farmland for 42 years,” said Frank Stepovich of Pearson Realty, “and this is the worst I’ve seen it in my time.”

No one is having a harder time accepting the raisin bust than the Armenian American farmers. This is a place, after all, where every summer both factions of the Armenian church hold separate “grape- blessing” picnics with priests in elaborate robes giving thanks for the berries that seem to get bigger, if not tastier, every year.

At this summer’s picnic, farmer Khasigian was cooking shish kebab and trying not to think about the harvest. Most years, the talk among the farmers in straw hats concerns the sugar content of their Thompsons, the calculations of when it’s best to cut the bunches and start the drying process.

This year, instead of holding their breath for three weeks and praying that it doesn’t rain, some farmers are praying that it does. Rain insurance will likely guarantee a higher price than the market.

To slash costs, Khasigian and his neighbors have cut out chemicals. The glut has turned them all into organic farmers.

“There’s no future in raisins, at least not now,” Khasigian said. “Probably never.”

His grandfather, Avedis Khasigian, planted his first 20 acres by horse, the rows crowded and the vines lined up crooked.

Khasigian’s father, Amos, eventually left the farm to go to school and teach economics at Pierce College. Khasigian himself grew up in Los Angeles and earned a chemistry degree at UCLA and a pharmacy degree at University of the Pacific.

He married a Southern California girl and, in 1987, moved back to the farm in Fowler to raise their five sons and serve as a Scoutmaster for Troop 390.

He and his father, who also returned home, began buying up more land. They planted table grapes and three kinds of apples and, of course, more Thompsons.

The apples were Khasigian’s attempt to not lean so heavily on one crop. For awhile, the Granny Smiths and Galas did well. But like everything else, so many other California farmers also converted to apples that they soon found themselves chin-high in surplus.

To keep his 200 acres afloat, he works full time as a pharmacist at the local poison control center. He said he pays for the privilege to live out in the country and farm.

“My in-laws in L.A. can’t understand how I can own so much land and cry poor,” he said. “They ask me, ‘Why don’t you just pull out the crops that don’t work and plant new ones?’

“What they don’t understand is there’s no magic crop out here. And you don’t just yank out something that you’ve put all this time and money and sweat into.”

In the days leading up to this harvest, Khasigian found himself doing just that. A big diesel tractor showed up one morning at his 30-acre vineyard. It took less than eight hours to clear the entire field, sweet grapes and all.

All that’s left are 13 stacks piled high and waiting for the strike of a match.

“A lot more farmers will have to do the same if we’re going to turn this around,” Khasigian said. “I’m afraid the worst is yet to come.”