Getting Chile

I've made a few calls to Chile this afternoon on how growers and exporters are coping with the challenging currency outlook, and a couple of exporters pointed to the brutal marketing period for Thompson seedless grapes in the late February and March time frame during the past season.
The Chilean peso has strengthened by 20% or more in the last few years, while labor costs continue to climb in Chile. Thus, growers are getting fewer pesos back from a static U.S. market and paying out more pesos to their harvest crew. With heavy shipments of the Thompson harvest from the central valley to U.S. markets in March, prices have been $2 per carton or more below the break-even point. Look for growers to move away from Thompsons in the coming season, among other structural changes in the Chilean deal.