Washington juice grape growers getting squeezed

KENNEWICK, Wash. - Dust churned up on a recent morning as Henry DeGraaf's small John Deere tractor cut furrows between rows of grapes on his 50 acres.

His face was covered in a thick layer of dirt, with only his eyes and the inner rim of his lips remaining unsoiled.

``It hasn't been fun farming the last few years,'' said the 65-year-old farmer, taking a break from his gritty work to wipe his brow.

The lowest prices for juice grapes in 10 years, stiff competition from California, the drought, rising production costs and a freeze that damaged last year's crop have put strain on DeGraaf's operation - and that of many other Washington family farmers.

``A friend of mine just sold 40 acres over here. He couldn't make it,'' DeGraaf said. ``Used to be you couldn't find grapes for sale, now there is plenty.''

Last year, DeGraaf got about $105 a ton for his grapes. He's not sure what he'll get this year, but he said he needs about $175 a ton to pay for water, chemicals and equipment.

A few years ago it was great, but that's when he was earning about $205 a ton, he said.

Nancy Boettcher, vice president of agricultural accounts at Bank of the West in Kennewick, said she's seeing increasing numbers of normally stable juice grape farmers asking for loans.

Many Yakima Valley farmers grow only juice grapes, so they are taking the downturn especially hard, she said.

Some have diversified with apples, but that market has is also in a downturn, she said.

Part of the problem is oversupply, said Mary Ann Bliesner, president of Valley Processing in Sunnyside, one of four major grape-processing plants in the Mid-Columbia that churn out juice concentrate and puree for jams and jellies.

``I do think some of the little guys are going to go out,'' Bliesner said. ``I am concerned with the grape industry as a whole. There is just too much production."

California is a big reason. Yet industry officials there say it's difficult to determine just how much juice the state produces.

Unlike Washington, many California growers sell their grapes for raisins, fresh table grapes, wine or juice, depending on prices. California grew 853,000 acres of all varieties of grapes in 2004.

Lyle Russell, 66, of Grandview, said it will be hard to grow his crop with less water. He plans to water a little less often and to closely monitor his vines. Russell said he believes he'll do OK. After all, he's been farming the same ground since he bought it at age 19 and is accustomed to crop price fluctuations.

``Farming is just kind of a gamble,'' he said.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.