1. Allied Grape Growers, 2015. All rights reserved. Welcome to: Allied Grape Growers’ Thompson Seedless/Fiesta Grower Meeting March 20, 2015

2. Allied Grape Growers, 2015. All rights reserved. Sections Nat DiBuduo Introduction & Setting the Stage Jeff Bitter Market Updates/Data/Trends Karl Lehman Dehydrator Considerations Crop/Field Update Emilio Miranda Considerations for Raisins Questions and Discussion

3. Allied Grape Growers, 2015. All rights reserved. This is a market update meeting. It is NOT a meeting to tell our members they have to make raisins in 2015.

4. Allied Grape Growers, 2015. All rights reserved. Today’s Position At this point, crop size unknown, the marketplace for Thompson Seedless is a long way from forming. But, we can look at some of the dynamics which drive the market to ascertain whether or not the direction is positive, the same or negative from last season.

5. Allied Grape Growers, 2015. All rights reserved. AGG’s Role in Marketing Your TS Crop To seek out all viable alternatives that allow our growers to maximize their return AGG is certainly not limited to marketing to crush facilities. To accurately communicate market conditions and keep growers informed To work with all potential buyers to identify growers that may be a good fit for “alternative” programs like packing for juice grapes or going to dehydrator

6. Allied Grape Growers, 2015. All rights reserved. Your Role in Working with AGG To be flexible with regard to whom your grapes may be sold to To stay informed of the market and understand the opportunities/challenges To grow a clean crop (mildew and rot free) in order for AGG to maximize our sales potential To consider all alternatives viable, including making raisins if needed To stay positive and focus on opportunities instead of talking pricing and markets down

7. Allied Grape Growers, 2015. All rights reserved. What are the buyer’s saying? “Our tanks are full.” “Our value-segment sales are off.” “Imports are cheap and available.” “We planted to our future supply needs.” “Argentina is selling cheap to generate cash.” “Australia is over-producing.” “Our (below $5) products are foreign now.” “We want to move up the price ladder.” These are not just “sayings”, they are evidenced with data and fact.

8. Allied Grape Growers, 2015. All rights reserved. There is currently no guarantee of any low sugar program this year. Thompson use for brandy will be extremely minimal, and the sparkling wine program at Mission Bell may use alternative varieties.

9. Allied Grape Growers, 2015. All rights reserved. Raisin Variety Uses Raisins Sun-dried in field Dehydrator (specifically Goldens) Selling green to a person or entity that buys on the vine and dries in the field at their risk Wine Dry White Sparkling Brandy or Distillation/Alcohol Concentrate Table & Cannery – N/A

10. Allied Grape Growers, 2015. All rights reserved.

11. 2014-2015 Shipments: (First six months from August 1) ◦ Domestic shipments are up about 1%. ◦ Export shipments (price sensitive) are down about 20%. ◦ Total shipments down 8%. ◦ Based on the current shipment rate, we could ship around 320,000 tons for the 2014-15 marketing season. 2014-2015 Deliveries: ◦ Natural Seedless raisin deliveries by growers to handlers are currently at about 275,000 tons. ◦ This could still increase but is not anticipated to exceed 300,000 tons at this point in the year. Inventories: ◦ We will likely enter the 2015-2016 raisin season with a slightly depleted carry-in from last year’s 140,000 tons, which should serve to balance packer inventory a bit. Raisin Market

12. Allied Grape Growers, 2015. All rights reserved.

13. Going green into the raisin market ◦ A good alternative for those not wanting to make raisins ◦ Demand from this segment of the raisin industry is currently good ◦ For dehydrators, natural gas prices have been softening since January 2014 making dehydrating a more attractive option ◦ There is likely margin and opportunity for those that want to take the risk of buying green grapes and making raisins. Dehydrator/Sell Green OTV

14. Allied Grape Growers, 2015. All rights reserved. Crush

15. Allied Grape Growers, 2015. All rights reserved. Crush

16. Allied Grape Growers, 2015. All rights reserved. Crush

17. Allied Grape Growers, 2015. All rights reserved. Crush

18. Allied Grape Growers, 2015. All rights reserved. Crush “The Argentinian wine industry is facing its biggest challenge in decades, as falling exports, rising inflation, tightened credit and a poor exchange rate combine to endanger the livelihood of many in the industry, especially those at the cheaper end of the market.”

19. Allied Grape Growers, 2015. All rights reserved. Crush

20. Allied Grape Growers, 2015. All rights reserved. Crush

21. Allied Grape Growers, 2015. All rights reserved. White Concentrate: White Concentrate: Market is currently uneconomical for California growers Market is currently uneconomical for California growers California grape $6-7/gallon California grape $6-7/gallon Competition is $5.50, and volumes are plentiful Competition is $5.50, and volumes are plentiful Argentina Argentina Making inventory to avoid wine excess Making inventory to avoid wine excess Selling cheap and fast to generate cash Selling cheap and fast to generate cash Apple surpluses exist, negatively impacting the market Apple surpluses exist, negatively impacting the market Health “news” encourages folks to avoid “sugary drinks” Health “news” encourages folks to avoid “sugary drinks” Concentrate Market

22. Allied Grape Growers, 2015. All rights reserved. “Replacing cookies and juice with fruits and vegetables………are achievements worth celebrating”, Obama said.

23. Allied Grape Growers, 2015. All rights reserved. Dehydrator Considerations Defect-FREE! Almost all grapes purchased by dehydrators are made into golden raisins, which have to be cosmetically sound (i.e. NO mildew and clean from rot, insects, etc.) Size matters Consider a thinning/sizing spray to create loser clusters with slightly enlarged berries “High” sugar The more sugar going in, the less work/energy to make a quality raisin. Plan on picking at 21 brix or higher Scheduling & Logistics Many dehydrators drive their equipment from field to field rather than hauling it. You will be part of a “line-up” of growers where crews will be moved to. Dehydrators often harvest grapes into October Yard/Road-side space will be needed for unloading/loading bins Hand picked There may be a viticultural benefit to having the field hand harvested Keep berms clean of noxious weeds Control leaf hoppers Please let us know if you are interested in going to dehydrator

24. Allied Grape Growers, 2015. All rights reserved. 2015 Crop Potential Multi-year Average

25. Allied Grape Growers, 2015. All rights reserved. Don’t limit yourself- Be prepared to make raisins if it becomes a market or financial necessity

26. Allied Grape Growers, 2015. All rights reserved. Considerations for making Raisins Row centers must be disked fluffy (and free of weeds and weed clumps) in preparation for terracing or continuous tray laying. Shut off water in late July or early August, allowing soil to dry. (Brix will likely be 18-19) More sugar the better at harvest - 21 or more to guarantee quality. At 21 Brix the drying ratio is 4/1 to 4.5/1. Can have poor quality below 18 brix. Harvesting a traditional trellised Thompson or Fiesta vineyards may be by machine on a continuous tray or by hand on trays. Discuss raisin insurance with your crop insurance agent well before harvest. Deadline is July 31 to sign up for insurance. Raisin and reconditioning insurance are different from each other and different from multi-peril crop insurance. Timing: Higher sugar is required, and fruit is exposed on the ground for 2 to 3 weeks, depending on weather. Must harvest crop prior to insurance deadline (September 20 – hand, or September 25 - machine). May need additional equipment. (terracer, forklift, etc.) Start early in contacting or getting to know harvesters and/or labor contractors. Start early in contacting or getting to know your paper (tray) source. Contact AGG regarding introductions to raisin packers if you currently do not have an established relationship.

27. Allied Grape Growers, 2015. All rights reserved. This is a market update meeting. It is NOT a meeting to tell our members they have to make raisins in 2015.

28. Allied Grape Growers, 2015. All rights reserved. Questions and Discussion