Grower prices down, retail prices up over a year ago

California fruit growers have come under pressure this year. Anecdotal reports suggest that more than a few growers are pulling out poor performing orchards after this year. Here is a link to the recent USDA ERS fruit outlook report that talks about grower prices in June.
An excerpt:

Lower prices received by U.S. growers for fresh-market grapes, peaches, and grapefruit in June drove the grower price index for fruit and nuts that month below a year ago for the first time in 2007 (fig. 1). At 155 (1990-92=100), the June index was 11 percent lower than the June 2006 index and the only time that the June index had fallen below the previous year since 2002. The June index also fell 2 percentage points from the May index due to the weakening of prices for fresh-use oranges, peaches, and strawberries (table 1). Supply increases stemming mostly from the expected larger crops of grapes and peaches, particularly in California, and grapefruit in Florida have driven their June prices down significantly from the same time last year, more than offsetting the fairly substantial grower price increases for oranges, lemons, fresh-use apples, pears, and strawberries. Smaller crops of these fruit were mostly behind these price gains, except for apples. Apple production rose slightly in 2006/07 but the lack of market competition this winter due to the freeze in California helped boost domestic demand for apples during those months, resulting in brisk movement of storage apples to markets. End-of-season apple inventories are at below-average levels, resulting in higher prices. The 2006/07 California Valencia orange crop is expected to be 19 percent short of last year’s harvest mostly due to the effects of the January freeze, limiting fresh-market orange supplies for the rest of the season and likely keeping fresh orange prices high this summer. The biggest price decline in June was for grapes. June grower prices for fresh market grapes averaged 42.5 cents per pound, down 65 percent from last year’s June average price. Fresh grape shipments from California’s Coachella Valley were in full swing in June, running 18 percent ahead of the same period last year at the same time that import shipments, mainly from Mexico, were also up significantly, based on data from the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS). The shipping season for grapes in the Coachella Valley as well as from Mexico has ended but California’s grape marketing season is still getting underway as production moves up to the major production region in the San Joaquin Valley. The initial production forecast in California for 2007 according to USDA’s National Agricultural Statistics Service (NASS) is 12.4 billion pounds, 7 percent larger than a year ago. The California table grape crop alone is also expected up 7 percent and this larger production is expected to put downward pressure on fresh grape prices through much of the summer. While weather problems have resulted in sharply lower production in many peach growing States, larger supplies in California have influenced the grower price drop for peaches in June from a year ago. Relative to other producing States, California dominates the national market for peaches as well as other stone fruit—plums, nectarines, and apricots. Shipments of these other California stone fruit were also running ahead of a year ago in June, likely increasing market competition among them. California peach supplies are expected to continue to build up into the summer months likely keeping their market prices down.

Consumers Pay More for Fresh Fruit in June
Like most years, the consumer price index (CPI) for fresh fruit in June dropped from the previous month as supplies of domestic summer fruit increased (fig. 2). At 326.3 (1982-84=100), the June CPI fell 3 percentage points from the May CPI but increased 5 percentage points from the June 2006 CPI. Retail prices declined in June from the previous month for Anjou pears, Thompson seedless grapes, and strawberries, offsetting price increases for Navel oranges, grapefruit, lemons, Red Delicious apples, and bananas (table 2). Along with diminishing supplies of 2006/07 U.S. apples in cold storage, Navel orange and lemon harvesting in California was winding down, helping to drive up their prices.