Supply and demand principles affect all facets of the economy, but it's an especially sensitive pricing mechanism in agriculture. USDA reports this week that organic food sales in the U.S. continue to climb, and have risen at a rate of at least 20 percent every year since 1990. That's demand.
On the flip side is the grape and raisin industry, which for three years now has been looking for ways to relieve the pressure of burdensome oversupply.
The scenario is familiar, high prices drive increased production leading to oversupply and depressed prices. Corn and bean farmers are familiar with the situation, as are those who produced hogs in 1999. Even the cash crop of cranberries, once so profitable producers employed helicopters in the harvest, have fallen on hard times.
Now, overproduction is claiming yet another victim in the agriculture sector…the grape industry. Low prices have plagued grape farmers for the past three years, yet production has been on the increase. This year, despite unharvested acres and payouts by the raisin industry to cut back or even remove vines, grape production will increase by seven to eight percent over 2001. The laden vines have brought hard times. Some producers are taking losses on every acre and finding additional work to make ends meet.
The industry is now turning to the federal government for help. The U-S Department of Agriculture already has plans to buy more than 55 million dollars of nuts and dried fruits for foreign aid and school lunch programs. Producers hope the U-S-D-A will act on an additional proposal to buy extra raisins and grape juice made from Thompson grapes.