International Prune Association Congress,

Adelaide, November 2004

Jeff Granger Australian Prune Industry

Association

Project Number: DP04004

DP04004 This report is published by Horticulture Australia Ltd to pass on information concerning horticultural research and development undertaken for the dried prunes industry. The research contained in this report was funded by Horticulture Australia Ltd with the financial support of the Australian Prune Industry Trust. All expressions of opinion are not to be regarded as expressing the opinion of Horticulture Australia Ltd or any authority of the Australian Government. The Company and the Australian Government accept no responsibility for any of the opinions or the accuracy of the information contained in this report and readers should rely upon their own enquiries in making decisions concerning their own interests. ISBN 0 7341 1113 4 Published and distributed by: Horticultural Australia Ltd Level 1 50 Carrington Street Sydney NSW 2000 Telephone: (02) 8295 2300 Fax: (02) 8295 2399 E-Mail: horticulture@horticulture.com.au © Copyright 2005

Eighth International Prune Association

Conference

Hosted by the Australian Prune Industry Association Incorporated

Radisson Playford Hotel

Adelaide, South Australia

8 November 2004 – 21 November 2004

FINAL REPORT

Horticulture Australia Project Number

DP 04 004

Report Prepared By: Jeff Granger Industry Development Manager Australian Prune Industry Association Inc ausprune@ozemail.com.au P O Box 669 YOUNG NSW 2594

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Contents. Page Media Summary 3 Expected outcomes and how they were achieved 3 Results of Discussions 4 Implications for Australian Horticulture 4 Disseminating Information 5 Recommendations 5 Acknowledgements 6 Attachments

Conference Agenda – November 9 7 Conference Agenda – November 10 8 Australian Prune Industry Presentation 9 Chile Prune Industry Presentation 13 France Prune Industry Presentation 16 Italy Prune Industry Presentation 17 Republic of South Africa Prune Industry Presentation 18 California Prune Industry Presentation 20 Links to Powerpoint Presentations 24 Japanese Market Development 26

List of Conference Delegates 30

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Media Summary The Eighth International Prune Association (IPA) Congress was conducted in South Australia from November 8 to November 12, 2004. The Australian Prune Industry Association (APIA) were hosts to delegates from the world’s major prune producing countries. Representatives attending the Conference were from Australia, France, USA, Italy, South Africa and Chile. It was hoped that delegates would attend the Australian conference from Argentina however this did not occur. The IPA had conducted a very successful fact finding mission to Argentina and Chile in January 2004. Members of the International Prune Association from most member countries joined this tour which was organized by the IPA secretary, Christian Amblard of France and lead by the IPA chairman Jeff Granger from Australia The formal proceedings of the conference were conducted at the Radisson Playford Hotel on North Terrace, Adelaide with two full day field tours to the Riverland region of South Australia and to the Barossa Valley. The conference focus was primarily based on the review of international production planning strategies based on statistical data collection, as well as the study of pest and disease information relevant to the Dried Prune industry in Australia and new cultural and production methods. Each country presented a report of the situation within the prune industry in their nation. Two excellent speakers presented papers on the role of and benefits of prunes in nutrition and health with particular reference to the low Glycaemic Index of prunes. The conference provided the opportunity for delegates to maintain industry contacts in growing, packing and support services and to seek new contacts. The opportunity was also available for delegates to investigate new technology and production trends that may assist Australian and overseas prune producers to increase efficiency by achieving greater production levels or by increasing competitiveness and reducing production costs. Attendance by overseas delegates at the Australian conference was reduced due to the 2004 season crop failure in California. Organisers were pleased to have greatly increased numbers of Australian delegates in attendance which more than adequately made up for the reduced overseas delegate numbers. The Californian crop situation has been the catalyst for a world wide short supply of prunes and has seen the cost of imported prunes increase significantly. Despite this, there has been no significant increase in the retail price received for prunes and growers and packers have yet to make any financial gains. Expected Outcomes and how they were achieved. Information delivered at the IPA Conference will assist the Australian Prune Industry to be better prepared in developing strategies to increase productivity and meet the challenges and opportunities of the international dried prune market. By providing a comprehensive report to the conference, each member nation is made aware of the problems and benefits that other

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producing nations are experiencing and is able to gauge with some accuracy how the industry in their own country compares with the prune industry in other countries. Visits to growers, packers and marketers benefits the producer in meeting the challenges that they will face in the future. Specific issues include new varieties and production methods, pest and disease management, dehydration and packaging innovations and market demands. Statistical data is collected by the International Prune Association secretariat and comparative statistics are made available to all members. The next IPA Conference is to be conducted in Italy in May 2006. The venue will be on the island of Sardinia. Results of discussions at the Conference.

• Australian prune production has been lower than expected over the last three seasons due to the ongoing drought conditions.

• Despite this continued drought, the Australian Prune Industry continues to compare favourably in comparison to other producing countries.

• Market stability and returns to Australian growers compare favourably with the other non-subsidised producing nations, namely South Africa, USA and Chile.

• Californian growers are very concerned at low returns for their produce and many growers have received less than cost of production returns for 2002 and 2003 season crops and have since experienced a general crop failure in 2004.

• South Africa is experiencing agri-political problems that will probably lead to the eventual downsizing of the industry. The present Government is doing little to encourage prune production or other agricultural pursuits.

• Argentina remains a threat to the stability of the prune industry because of continued uncontrolled increases in prune tree planting and a very disorganized marketing arrangement.

• The major problem of concern to producers in all countries is water supply and competition from other water users.

• The Italian vice Chairman of the IPA, Mr Alberto Levi has been elected Chairman for the Sardinia Conference in May 2006.

. Implications for Australian Horticulture. The conference reinforced the fact that the Australian Prune Industry is the only member of the IPA that has neither Government subsidies or cheap labour and it is significant that we continue to be cost competitive with other members. From a growers perspective, the downside of this statement is that returns to Australian growers are relatively low. The Australian industry is at risk if another country should attempt to export prunes to Australia at a cost that is significantly lower than the present Australian market price. Australia needs to be aware of the situation in both Chile and Argentina as both of these countries are significant emerging producers. Chile and Argentina are both large exporters of prunes and are both low volume consumers of prunes. While Chile and Argentina are the major threats to Australia, the USA has previously been a threat and still has the potential to cause market disruption and price instability.

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The information provided to delegates at this conference will assist producers to achieve greater efficiency by allowing them access to the latest research and development findings, world’s best practice production methods and the latest technology advancements. Dissemination of information. The information provided to delegates attending the IPA conference is now available on the IPA web site and will be circulated through the Australian prune industry by means of the APIA Newsletter, discussions with Australian Prune Industry Association Branch meetings and by a report to the Annual Conference of APIA in October 2005. All conference presentations are attached to this report and the presentations are also available on the IPA website www.ipaprunes.org, A password is required to enter the secure members site. The password is available to eligible persons by making application to APIA via email at ausprune@ozemail.com.au The guest speaker presentations to the IPA conference in Adelaide covered topics of dietary and nutrition information concerning dried prunes, and planning information based on world production forecasts and statistical information.

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Recommendations. Information that has been passed on to members of the Association has been left to the individual to assess for suitability for Australian use. A recommendation has been approved by the National Executive of APIA to attend the Fact Finding mission to Argentina as Australia could be a target for further export pushes by the South Americans. Acknowledgements. The Australian Prune Industry Association Inc acknowledges the support of the following organizations who assisted with funding of the 2004 IPA Conference;

• Horticulture Australia Limited • The Australian Prune Industry Association • The Angas Park Fruit Co/Sunbeam Foods • J C Granger& Sons • Country Foods Pty Limited • Comite Economique du Pruneau (France) • Sunsweet Growers Inc (California) • The Ashlock Company (California) • Taylor Brothers Packing (California) • Lindauer River Ranch Inc (California)

The Project Leader offers particular thanks to the Conference Planning Committee;

• Ann Hoven, Office Manager, J C Granger & Sons, Kings Vale NSW • Cheryl Heley Grower,”Budgi-Werri” Prunes, Wirrimah NSW • Sue Marte District Horticulturalist, NSW Dept Primary Industries, Young • Colin Farey The Angas Park Fruit Co, Angaston SA • Gilbert and Magdelena Aue

Growers, Oakbank SA

A special thanks to Sue Marte for assistance with the finishing touches to this report.

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2004 - INTERNATIONAL PRUNE ASSOCIATION

EIGHTH WORLD CONGRESS 8 – 11 November 2004

Radisson Playford Hotel Ballroom

CONFERENCE AGENDA

DAY ONE – Tuesday 9/11/2004. 9.40 am Coffee/Tea 10.00 am Congress Opens – President IPA, Jeff Granger - Australia 10.10 am General Secretary Report, Jean-Michel Delmas - France Statistical Reports 10.40 am Presentations from each Member Country

Situation within each country, current prune supplies, crop forecasts and predictions for the future.

Australia Jeff Granger France Phillipe Valay Italy Alberto Levi Republic of South Africa Chris Krone Chile Camilo Pizzaro California Rich Peterson Composite report on Argentinian situation. Christian Amblard

1.00 pm Lunch (Lunch sponsored by the Lindauer family.)

2.00 pm Penny Small, Dietitian, University of Sydney, Ph D researcher. Glycaemic Index and prunes. A report on work which Has been carried out. 2.45 pm Dr Peter Clifton Food Science Australian, Adelaide

To report on the nutritional value of Dried Fruit with reference to where prunes fit in to that work.

3.30 pm Afternoon Tea. 3.50 pm Prof. Jean-Marie Bourre France Prunes and Brain function. 4.35 pm Congress Adjourns until 9.30 am Wednesday 10 November 2004.

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2004 - INTERNATIONAL PRUNE ASSOCIATION

EIGHTH WORLD CONGRESS 8 – 11 November 2004

Radisson Playford Hotel Ballroom

CONFERENCE AGENDA

DAY TWO – Wednesday 10/11/2004. 9.15 am Coffee/Tea 9.30 am Congress Reconvenes REPORTS ON AUSTRALIAN PRUNE INDUSTRY RESEARCH ACTIVITIES 9.35 am Ms Delia Dray – Program Leader – NSW Dept of Primary Industries How the Department of Primary Industries fits in with Industry 10.00 am Michael Barkley – Plant Virologist – NSW DPI Prune virus trial findings 10.30 am Roy Menzies – Specialist Horticulturalist - NSW DPI The Australian Prune Industry Manual and Preliminary work on Irrigation Trial. 11.00 am Coffee/Tea Break. 11.30 am Ms Anne Mooney Report on Integrated Pest and Disease Management Project. 12.00 noon Ms Sue Marte – Horticulturalist – NSW DPI Investigation of Biological control of Fruit Tree Borer. 1.00 pm Lunch Break

(Lunch sponsored by the Lindauer and Bains families.) 2.00 pm Rich Peterson – California Dried Plum Board – Japanese Prune Market 2.30 pm Christian Amblard – Comite Economique du Pruneau 2.50 pm IPA Congress concludes. 3.00 pm Coffee/Tea Break 3.30 pm Australian Prune Industry Association Inc – Annual General Meeting Australian Delegates Only.

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CURRENT AUSTRALIAN PRUNE INDUSTRY SITUATION Adelaide, South Australia, 9 November 2004

Jeff Granger Industry Development Manager Australian Prune Industry Association Inc It is my pleasure on behalf on the Australian Prune Industry Association Incorporated to present this report which briefly explains the present situation within the Australian Prune Industry. As most delegates will be aware, Australia has just experienced three consecutive years of drought with the last season being recognized as the worst drought in the recorded history of Australia. Most Australian agricultural production has been severely affected by this drought and as I speak here today, the effects of the drought continue to impact on our farmers and orchardists as well as service industries and suppliers.

GEOGRAPHIC LOCATION The Australian Prune Industry is physically located over an area that is approximately 1,000 kilometres from east to west starting in Young in NSW and proceeding via the Murrumbigee Irrigation Area of NSW to Renmark or the Riverland region of South Australia and finally to the Barossa Valley in South Australia. We visited both the Riverland region and the Barossa Valley as part of the conference tours.

2004 SEASON HARVEST Fortunately for our prune producers, the major irrigation region, the Murrumbidgee Irrigation Area, classify prune growers’ water requirements as ‘high security’ and therefore only isolated water restrictions apply and a good-sized prune crop was harvested in 2004. The most important factor affecting the 2004 season crop was the long dry periods and extreme heat experienced during summer months. The non-irrigated prune production area of Young was severely affected by the drought with many prune growers having no water at all for the year while others had limited supplies of irrigation water which ran out before the crop was ready to harvest. Some growers with limited water supplies chose to irrigate just to keep the trees alive and virtually abandon the 2004 season crop. South Australian prune growers were also seriously affected by the dry weather and their production levels were also severely affected. With this scene set, the indications were for a very lean harvest for Australia, however to the great surprise of our industry the final result was quite respectable. The Murrumbidgee Irrigation Area produced one of the largest crops of dried prunes ever, aided by the fact that sales of fresh prunes on both the International and Domestic markets were very small. The Young area produced a light crop of about half the normal tonnage, which was considered to be quite reasonable considering the extreme heat and drought during the season. South Australia also produced a light crop.

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Our final graded tonnage for 2004 is not available because Australia does not report these figures until all the fruit is graded which differs from the method used by some other prune producing nations. The expected total tonnes for 2004 will be about 3400.

GROWERS Moving on now to the present grower and packer situation. Despite the troubles caused by the drought, it has to be said that growers are generally confident for the future of the industry. In the east around Young, there have been significant numbers of prune trees removed over the past few years. Many of these orchards were very old and were simply past their useful life and were unable to survive the stress of the drought. At least one large orchard has been removed to make way for real estate development. The larger growers have removed trees but are replanting the area with more trees per hectare. There are also new plantings of prunes on previously unused land. The net result is a definite reduction in the area of land planted to prunes however the number of trees has probably increased slightly. A dip in production from the region is expected until the new plantings commence to bear fruit. In the Murrumbidgee Irrigation Area there have been large-scale plantings of new prune trees and only small numbers of trees have been removed. These plantings are not expected to carry commercial quantities of fruit until about the year 2008. Many of these new plantings are aimed primarily at supplying market demand for fresh prunes or ‘sugar plums’ as we know them. In South Australia, the production level remains fairly static with areas of prunes being removed but generally being replaced by new plantings. There have been reports of several plantings of prunes from outside the traditional prune growing areas. The extent of these plantings and the likelihood of them being successful are not known at this time.

PACKERS The rationalization of packing interests continues to occur. Only twelve years ago there were eight packers in the Australian Prune Industry Association – today there are four and only two of these have significant production. The rationalization of packers in the Australian Dried Grape and Dried Tree Fruits Industries has seen an even greater reduction in numbers from approximately 15 packers about fifteen years ago to 1 large packer and a couple of very small packers who service only niche market sectors. This year has seen the Angas Park Fruit Company taken over by the Sunbeam Foods group. These were the two major players in the Dried Tree Fruits and Dried Grape market until the takeover. Similarly the Sunbeam prunes sector has now become the major player in the Australian industry by assuming control of the Angas Park brand, which was previously the largest packer of prunes in Australia. Growers are pleased to see the confidence in the Australian Prune Industry displayed by Sunbeam Foods in their takeover of the Angas Park Fruit Company. The true value of the

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takeover can only be assessed after time and we look forward to seeing the venture succeed and prosper. At the other end of the production area of Australia, the Young District Producers Cooperative continues to rationalize their operations. In recent years the Cooperative has taken over the J C Granger & Sons prune packing business and later the Ernest Hall and Sons Pty Ltd dried fruits packing business. In another move to streamline business the Cooperative further rationalized business by hiving off their canned prune business to Prune Products Pty Ltd to be packed by J C Granger & Sons. This move allowed Young District Producers to concentrate solely on the supply of supermarket lines of dried. The Excello Foods business formerly based at Griffith has been relocated to a new site. The business has changed owners and name at least four times in the last three years. It has lost market share although it still maintains a presence in some supermarkets and has a small export business. It is thought that the rationalization of packer interests has settled down and all packers will now seek to grow their respective market sectors.

THE MARKET FOR PRUNES IN AUSTRALIA The market for prunes in Australia remains very positive. Per capita consumption has not risen in recent years but importantly it has not fallen either. No recent data is available to support our figures of a per capita consumption of prunes in the vicinity of 275 grams of prunes per year. Supermarket sales remain the major market for prunes in Australia however a significant tonnage is taken by institutional buyers such as hospitals, gaols, nursing homes, accommodation venues and caterers. Sales of prunes on the Australian market are predominantly whole prunes. As expected, the demand for pitted prunes is increasing and it is believed that pitted prune sales will exceed stone fruit sales within 5 to 10 years. A trend towards ‘convenience’ foods has been apparent for many years and it has been obvious that the demand for pitted prunes was going to increase also. Demand for prunes as a food ingredient has also increased over recent years and this has lead to the development of some manufactured products. These products are not new, however an increasing trend towards preparing the product to the individual customers specification is emerging and this has created several different product lines within the one product. A small market for prune juice exists in Australia and this is presently serviced by up to ten manufacturers. A small but increasing market for organically produced prunes also exists in Australia with a number of producers and three packers now involved in this sector. This sector is expected to grow however the level of ‘premium’ payment received for the organic product is reducing to a level not greatly above that of conventionally produced prunes. Australia exports only a small amount of its annual prune production, mainly because the total production does not leave much to spare for the export market.

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PRUNE PRICES Australian prune producers are just the same as prune producers all over the world, we would like to see returns improve. There has been no significant increase in grower returns for many years – probably around fifteen years. Our growers have borne the full brunt of the droughts over recent years and have supported our packers in keeping Australian produced prunes on the supermarket shelves when imported product has been available at a very competitive price. Our growers would join with growers around the world in seeking better returns while accepting the realities of market demands and opportunities. The price issue can be echoed at the packer level with packers taking no significant price increases for many years. Our packers have rationalized their operations both internally and externally over the past 15 – 20 years to keep production costs down. It is argued that packers can’t do much more to reduce their costs and that the next logical step must be to seek higher returns in the supermarket. This therefore brings me to the marketers of our product. There are only two major marketers of Australian produced prunes and a number of minor players in this market sector also. There are several marketers of imported prunes also. With the present world prune supply that is considered to be low, it continuously annoys me to go into Australian supermarkets and find several brands engaged in a price discounting battle that will not benefit anyone other than the supermarket. The time has never been better for all prune marketers to take advantage of this short supply by seeking price rises. Surely this must benefit everyone. This may be an over-simplified view of the big picture with regards to prune sales and marketing but surely if the opportunity is there for everyone to gain a benefit, then there must be some other agenda involved if prices can’t be moved upwards. On behalf of the Australian Prune Industry Association Incorporated we hope that you enjoy your time in Australia. It has been our great pleasure to host the 2004 International Prune Association Congress and we thank you for attending in such large numbers. Thank you for listening. Let’s all get out there and take advantage of the opportunities that present themselves.

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PRESENTATION IPA 2004 - CHILE’S INDUSTRY by Camilo Pizarro

1. Visit to Chile and Argentina – IPA Commission – January 2004 At the beginning of 2004, we had the pleasure of receiving an IPA delegation in Chile whose objective was to know more closely the general condition and organization of the prune industry. This visit which had been planned by the Secretary General of the IPA with the purpose of trying to join, counsel and reincorporate Argentina into the heart of the IPA; it was transformed into a rather massive visit which included all the representatives of the countries’ members except South Africa. With this visit we were able to gather an important group of prune exporters from Chile in the Park Plaza Hotel where they were able to interchange frank opinions and to meet the main authorities of the industry organizations from France and California. The sole fact of having had this gathering allowed through 2004 to set the bases of a more effective cooperation between the main Chilean actors of the prune industry as we will comment later. Furthermore, among the participants, there was at least one who formally joined the IPA. 2. Chile’s Market Operators (2003 numbers)

PRODUCERS

Number of producers by rank in production in tons Processors 24% 9 300-700 12% 26 200-300 18% 64 100-200 28% 112 0-100 18%

PROCESSORS

Prunesco 31% Frutexsa 18% Agroprodex 6% La Rosa 5% Sunagro 5% Pacific Nut 4% 4 Companies 12% 10 Companies 13% 7 Companies 3% 24 Companies 3% 51 Companies 31,317 tons

MARKETS

Mexico 24% Germany 16% Russia 6% Brazil 6% Spain 5% Italy 5% Peru 4% Venezuela 4% Columbia 3% Holland 3% 24 countries 24% 52 countries 31,317 tons

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3. Evolution and Projections of Chile’s Production Year Area (ha) Production (tons) Average

1990 3,164 13,000 4.11 1996 5,622 14,750 2.62 2004 7,300 33,000 4.52 2008 9,370 43,100 4.60 2013 11,000 52,800 4.80 2018 12,700 63,500 5.00 The preceding numbers show an important and sustained increase in Chile’s production during the latest years and furthermore, they show that this tendency will be maintained in the future. Surely, we can expect that year after year the plantation volumes will increase. On the one hand the historic prices of prunes, that many countries cannot reach to finance the costs to the producers, in the Chilean case permitted to obtain reasonable utilities and consequently a constant increase in plantation. On the other hand, the agreements of free trade subscribed by Chile with Europe, the USA and Asian countries are generating expectations of a greater competition from Chilean fruits and possibly better prices for the producers which promote a larger plantation. Finally, the level of the present prices can generate immeasurable expectations on prunes and to reach an uncontrollable boom of plantations. Our duty is to show this danger to farmers, and we are just doing that, asking them to be careful in their decisions to plant new trees. As we have pointed out in previous congresses, in Chile there are no regulations that can influence new plantations, and neither are subsidiary methods or any other kind that might allow to control them. Only the market operates. 4. Marketing and Development Actions It is the active company policy and permanent participation in international food fairs as is the case of the Sial-Paris this year. On the other hand, a promotion was effected in the Scandinavia area “Promotion of the Export of Nuts and Prunes for the Scandinavia markets”. Under the initiative of Prunesco there have been meetings with processors and exporters of our country and we have committed, for this year, to create the Processors and Exporters of Prunes of Chile’s Association. Within the main objectives of this Association will be the implementation of the modifications that each market is continuously realizing on the quality standards and its distribution and control among its associates. Furthermore, the Association will have promotion campaigns of the Chilean prune, and will become an information center to obtain a better order and comprehension of the global market. 5. Present State of the World Market The hard decrease of the harvest in Argentina and especially in North America has generated an under-abundance that is shown in the important increase in prices at sales and to the prices to the producers.

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We are in solidarity with the producers of Argentina and the USA in so far as we know that they have had a difficult year, and we hope that in 2005 their harvest will be normal. The under-abundance and the increase of the sales prices can force the world industry to decrease the consumption for there will be clients that will replace the purchase of prunes, whether it is because they could not find them in the markets or because the prices forced them to find a substitute. Thus, if the following harvests are large, the challenge will be not only to increase the world consumption but also that we will have to recuperate the clients that have ceased to consume because of the under-abundance. 6. Expectations of the 2005 Harvest in Chile Even though right now the date for a clear estimation of the next harvest is premature, we can predict that the 2005 harvest will be inferior to that of the current year by a percentage that varies between 15 and 20%. We can see a lot in the recent fruit, which is important in the central zone, becoming normal toward the center-south zone.

7. Final Comments * We estimate that during the next two to three years and while the stock levels are not normal, we will have good sale prices and easiness in placing the product among the consumers. * The prices to producers will generate an important increase of plantations in Chile and Argentina, and there will be simultaneously an increase in production because of better yields per hectare, which in case in Argentina will be obtained with the investments demanded by the infrastructure of defense against the damages caused by hail. * Year after year productions of Chile and Argentina will be more and more relevant in the world context which forces each country to organize and implement joint actions of the industry to develop new markets and to increase consumption. * Nevertheless, let us continue realizing efforts to increase the consumption of prunes in the traditionally consuming countries; we must start to look at and fix more attention on the markets of Eastern Europe, India and China. Also Brazil, the South American giant, which 10 years ago consumed 12,000 tons of prunes must be the object of our interest and we must develop advertising campaigns to substantially increase the current consumption taking advantage of the economic recuperation, especially during the last year.

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2004 IPA Congress Adelaide

Presentation by Philippe VALAY for the French delegation

Dear Friends, The French orchard has been stabilized, but anyway we have to face variations of production from year to year. Our production experienced some temporary difficulties those last years, with a very high level of carry-over stocks. The 2004 crop was arriving as we still had a carryover of 44,000 metric tons, i.e. a full year of sales. So as to maintain prices and save a maximum of growers and packers, we negotiated and set up an inter-professional agreement including the following decisions:

- Volume reduction by quality selection, by increasing up to 80 by half kilo the maximum size count salable to packers. Often growers chose not to dehydrate those fruit so as to spare the cost of drying. The remaining small fruit were destroyed under control of the BIP, generally by distillation or animal feed. So, reducing the general grower return by 3-5% came to decrease the volume packers had to buy by 8-10%.

- Splitting the crop into 2 parts: a first part of 32,000 tons (70-75% of the total crop) corresponding to the volume that could be normally bought, then paid under normal conditions: that tonnage was dispatched between the growers following a personal reference that had been calculated using their two best recent crops; the rest of the crop, about 12,000 tons, remains in a second part belonging to growers but warehoused in packers facilities. Depending on the market evolution at the beginning of the marketing year, that second part might have been either diverted to destruction or gone to normal use, by parts or as a total. The special conditions of this year on the World prune market made that the second part will be bought in totality at normal grower prices, with only a few months payment delay for growers.

We think that the future of prune production in each of our countries is depending on growers, because only them have constant concern of maintaining the production and its balance over long term periods. In that sense we think that growers must pay a high attention to keeping tight control on the strategy of their co-ops, which are in each of our countries the industry leaders thanks to whom production can be maintained and developed.

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ITALIAN PRUNE INDUSTRY

Adelaide, South Australia, 9 November 2004 by Alberto Levi President, Cooperativa Modenese

Italy’s 2004 prune production totaled 1,500 MT. Organic prune baby food is becoming more popular despite its 30% higher price than conventional production. The trend is toward pasteurized prune products in higher quality packages that do not need preservatives. Colorful, attractive package graphics are an important sales tool. I would like to highlight my co-operative’s website showing how it emphasizes the origin of the company’s products and their traceability. I demonstrate how a code number on the package can be used to trace the product back to the farmer and his orchard in case of a recall. I stress the Italian government’s concern about traceability by alluding to official independent auditors who certify and control the traceability process. [Delegates were then taken on a tour of the Cooperativa Modenese Essiccazione Frutta website to view the traceability system. Readers can access www.montere.it and search the traceability site using the code that is found on every packet of the Mont Re brand prunes. Eg. “Lotto J 300B 01” ]

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SOUTH AFRICAN PRUNE INDUSTRY PRESENTATION TO THE IPA-CONGRESS IN AUSTRALIA

9 NOVEMBER 2004

C J T Krone

Mr Chairman and honourable delegates, It is a great pleasure for our delegation to participate in this Conference. Our industry is small but all the factors that influence the world markets influence us similarly and therefore it is as important for us as for any large producer to participate in this Congress. 1 PRODUCTION:

Although our production is small and has decreased in recent years, there is a renewed interest in prunes. The 2004 crop of 2684 metric tons was slightly up on the 2003 crop. The crop is still consumed domestically although the emerging of more packers may cause exports to grow.

South Africa’s bearing prune acreage at the last census was 580 hectare. Due to slow replacement of trees the average age of orchards is rising. This can lead to a decline in production. Price competition from other stone fruits and grapes is fierce. This tendency is similar to the current world supply situation, but could be a threat to the local industry should production decline to the extent that it becomes of no significance. Prunes are produced in the valley of Tulbagh and surroundings, a small area in the Western Cape Province. This entire crop is therefore vulnerable to adverse weather conditions. The winter of 2004 was exceptionally dry. Continuous hot and dry conditions might have a negative influence on fruit size, quality and the size of the crop. 2 MARKETING:

The industry consists of 121 prune growers that also grow a variety of other crops.

The number of packers who trade in dried fruit in South Africa has increased from 3 to 28 over the last five years. Of these packers 8 handle prunes. Some packers have markets that they cannot supply, whilst others have more product than they have markets for. Prices are influenced by this situation. SAD was transformed into a public company in 1998. This means that there are no co-operative packers left in the industry. SAD was sold in 2002 to a big South African food company Pioneer Foods, and is still the biggest dried fruit packer retaining a focus on dried fruit. Although our government has shown a better understanding for agriculture lately, absolutely no marketing support or subsidies of any kind are given to growers and packers. The South African industry finds it difficult to compete on the global market, amongst others because of subsidies in certain countries which are major producers of prunes. Due to these factors the South African farming community is still under severe financial pressure, which is not made easier by adapting to deregulation and restructuring of our agricultural industry.

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Democratisation of South Africa went well, inflation is under control and interest rates are still on a downward trend. The strength of our currency against other major currencies inhibits exports. The industry recently acknowledged the need to organise itself, forming an association to which the majority of packers belong. This association will address some of the marketing and other problems that are experienced within the industry, starting in 2005. 3 PROMOTION:

The prune crop is too small to fund a marketing or promotional programme and the supply is automatically controlled as no new plantings are made currently.

Our industry has investigated the nutritional and health characteristics of prunes with positive effect. The industry is currently looking for partners to venture into joint research on the health benefits. If this is successful it will most probably have to be aimed at the health benefit of dried fruits inclusive of prunes. The funding system for projects and research in the South African dried fruit industry is based on a principle that each fruit kind pays its own way and cross subsidisation does not take place. This makes it very difficult for a commodity like prunes to fund a major project on its own. Funding is by statutory levy, currently six cents per kilogram. This is less than one percent of the average price of prunes at the farm gate. The small profit margins in South African agriculture do not allow for increases in levies. 4 A CHALLENGING NEXT 10 YEARS: Those of you who had the privilege to attend the conference in Italy might remember that I referred to the political situation in Zimbabwe at the time, stressing that agriculture is affected by many factors over which it has little or no control. At the same time agriculture has proved that it is an adaptable industry and that it can successfully address these issues. The South African industry is facing an enormous challenge to transform itself over the next 10 years, providing access to the previously disadvantaged black groups in a structured and regulated way. Farms and packers in the prune industry will have to empower workers by way of joint ownership and other means. This is unique in the world. It is with a sense of pride that I can inform conference that South African growers and packers accept transformation and empowerment as a challenge and do not perceive it as a threat to the industry. Yes, there will be difficult times posing serious problems and unique challenges. I sincerely believe that South African agriculture will not only survive, but will in fact become stronger and contribute to a stable and prosperous country by continuing to feed the nation and provide employment opportunities on a continent where unemployment is the single most serious threat. Thank you for the opportunity to address you today.

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CALIFORNIA PRUNE INDUSTRY by Rich Peterson

INDUSTRY OVERVIEW

The California prune industry consists of about 1,000 growers and 21 handlers or packers. All growers and packers are represented by the California Dried Plum Board (CDPB), a state marketing order that operates under the authority of the California Department of Food and Agriculture. The CDPB's mission is to help the industry expand the worldwide demand for California prunes through generic (non-branded) public relations, sales promotion, sampling, educational activities and research.

The Prune Marketing Committee (PMC) represents all growers and packers through a federal marketing order that operates under the authority of the U.S. Department of Agriculture. The PMC's mission is to help facilitate the orderly marketing of California prunes by establishing and enforcing minimum standards for quality, size and pack specifications; providing industry shipment and inventory information to facilitate better marketing decision making and employing supply control techniques when conditions warrant.

STATISTICAL UPDATE

California's bearing prune acreage was estimated by the California Agricultural Statistics Service

for 2004 at 70,000 acres which was 3% lower than 2003. Non-bearing acreage is expected to drop slightly from 8,000 acres in 2003. The reduction in acreage since 2001 was accomplished through voluntary tree pull programs funded by the USDA and the industry which removed over 18,000 acres.

Prune tree sales reported by nurseries decreased by 42% in 2004 to 173,000 trees and are projected to decrease further to 133,000 trees in 2005. The annual replacement level is considered to be about 200,000 trees.

The 2004 prune harvest is expected to reach only about 45,000 short tons, down 74% from both 2003 and the five year average of 174,000 short tons. The .6 ton per acre yield in 2004 was about 73% below the 2.2 ton five year average yield. This crop disaster was caused by hot, dry and windy weather in March during the bloom period that led to poor pollination and the smallest crop in recorded industry history.

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The total supply in 2004 will only be about 113,000 short tons which would be 53% below both the year before and the previous five year average. While we carried out 69,000 tons last year, we expect to carryout very little at the end of this year.

The California Agricultural Statistics Service reported that the average grower return per ton

dropped by 5% in 2003 to $772 which was 2% below the previous five year average. The average return per bearing acre increased 4% year-to-year to $1,852 due to the higher yield per acre.

Total shipments increased by 12% in 2003 to 173,000 tons on the strength of a 29% increase in

export shipments that offset a 1% decrease in domestic shipments. ORGANIZATIONAL RESTRUCTURING

The California prune industry has gone from a persistent and burdensome oversupply situation to a devastating crop disaster in 2004. While grower prices will be higher this year, they will not be high enough to make up for the very low yield. The difficult times faced by growers and packers have led to considerable debate about changes the industry should make for the future. Changing the federal marketing order has been the focus of a portion of the industry with the following results:

• Suspending outgoing product inspection because customer grade standards are higher than those of the marketing order.

• Suspending reserve pool and green diversion provisions because it is unlikely the

industry could ever agree to use them. • Decreasing the frequency and detail required in handler shipment reports due to

concern about releasing information that would benefit competitors. It has more recently been proposed that the entire federal marketing order be suspended at the beginning of the next crop year. A taskforce chaired by Gus Collin has surveyed industry leaders and is meeting to determine which federal marketing order provisions should be continued and under what authority: state marketing order, federal marketing order or some other organization.

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MARKETING UPDATE

The state marketing order has experienced significant change as well with over a 50% reduction in the California Dried Plum Board’s budget over the past two years, primarily as the result of eliminating generic advertising in the US and reducing other marketing program budgets. Nutrition research and public relations continue to be the cornerstones of the CDPB’s marketing programs. We are positioning dried plums in the US as the #1 fruit for digestive health because of their antioxidants, fiber, sorbitol and potassium. This is a much bigger concept than laxation – it’s about lifestyle and wellness. Our target audience is generally healthy women who are motivated by wellness of mind and body, are diet prone and rely on processed, ready-to-eat foods for themselves and their families. Our program goals are to:

• Increase digestive health awareness • Dramatize the information gap among consumers and health professionals • Leverage existing research and fund new research • Demonstrate how poor digestive health affects mind, body and lifestyle • Make dried plums the “essential solution”

We are currently undertaking a literature search on digestive health and will host a digestive health summit for the leading experts in this field early next year. Next year we plan to develop a website where physicians, nutritionists and consumers can communicate about digestive health. Brochures, mailings, press kits and a spokesperson will also carry the dried plum digestive health message. The objectives for our nutrition research are to:

• Maintain dried plums’ role in a balanced and health-promoting diet • Discover and/or add validity to the known and yet-to-be identified health benefits related

to eating dried plums • Support nutrition communication efforts in consumer public relations

Currently we are conducting the following research projects:

• An annotated bibliography of digestive health research • The glycemic indexes of dried plums, prune juice and fresh plum juice • The oral and dental health benefits of dried plums

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In the food technology area, we exhibit at trade shows like the Institute of Food Technologists and Research Chefs Association to increase awareness of dried plums as a food ingredient. We are developing prototypes for low carbohydrate and healthy bakery products, confectionary products, snacks, sauces and meat products to stimulate adoption of dried plums in new and existing products. The export market now accounts for 50% of industry shipments, and we continue to promote our products in Asia and Europe. Due to the dramatic reductions in product availability and the CDPB budget, fewer export markets will be targeted this year. Our primary focus in all export markets is encouraging California prune consumption as a healthy snack with their versatility as a cooking ingredient a secondary focus.

SUMMARY

The California prune industry is facing many challenges. The future for prunes worldwide will also be very challenging due to economic threats, environmental restrictions, the increasing availability of substitute fruits and snacks and changing consumer food preferences. Our ability to meet these challenges will depend upon our collective success in adapting to changing conditions, improving the quality of our products, developing more value-added prune products and communicating compelling reasons why consumers should eat prunes. The IPA can play an important role in helping the prune grower and packer community worldwide cope with these challenges by providing a forum to address them and the information to better understand them.

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Links for Powerpoint presentations:

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Fig 1 – California overview Fig 2 – IPA statistics Fig 3 – Anne Mooney presentation Fig 4 – Chile/Argentina mission overview Fig 5 – Delia Dray presentation Fig 6 – Japan market overview Fig 7 – Prof Beurre presentation Fig 8 – Michael Barkley presentation Fig 9 – Country of Origin presentation Fig 10 – Penny Small presentation Fig 11 – Peter Clifton presentation Fig 12 – Roy Menzies presentation 1 Fig 13 – Roy Menzies presentation 2 Fig 14 – Sue Marte presentation

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JAPAN MARKET DEVELOPMENT by Rich Peterson In explaining how the California prune industry developed the Japanese market, it is helpful to think of the process in terms of The Marketing Mix or the 4 P’s of Marketing: Product, Place, Price and Promotion. These are the variables that marketers try to control in order to best satisfy customers in the target market.

PRODUCT While exports to Japan date back to the early 1950’s, growth really began in the mid-1970s with the introduction of Miki Prune Extract. This is a prune concentrate – like product manufactured in Japan from California prunes. It is sold as a dietary supplement by over 100,000 Japanese women (and a limited number of men) in-home to friends and neighbors. It can be eaten by itself, dissolved in water or juice, spread on cookies or bread or used as an ingredient in a variety of dishes. This product became so successful that Miki bought a California prune orchard in 1990 and became a California prune handler. While there have been many companies that have sold their own version of prune extract, none has seriously challenged Miki’s dominance. Miki now sells a full line of healthful foods as well as cosmetics and household products. Our industry’s challenge was to educate consumers that California prunes are sold as dried whole and pitted prunes also. Today, most prunes are consumed as a snack with less frequent use in yogurt, stewed prunes, salads and baking.

PLACE

Much of the prune tonnage is shipped to Japan in bulk and then rebagged into retail packages or processed to make concentrate or juice. The import tariff on dried prunes was only 4% while juice and concentrate had a 22.5% tariff. These have since been lowered to 2.5% and 10.3% respectively. The consumer prune market has historically been dominated by Japanese rebaggers who had done little to promote California prunes at retail. However, they had considerable leverage in selling through the traditional food channels which are complex and tied to longstanding cultural relationships. As a result, California packer brands had not been able to gain a strong foothold in the Japanese market. Our challenge was to capitalize on the positive image of prune extract built through in-home sales by extending it to dried prunes sold through supermarkets, department stores and small grocery stores.

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There were over 700,000 retail food outlets in Japan with supermarkets accounting for only 30% of total food sales. Dried prunes had limited retail distribution and were often stocked in low traffic, poor visibility locations near dried fish and other traditional Japanese snacks. When the California Prune Board began its generic marketing campaign in 1987, trade education was a major focus. Educational seminars and receptions were scheduled in Tokyo, Osaka and Nagoya to educate importers, rebaggers, distributors, retailers and the trade press about California prunes and the planned marketing activities. Exhibits at trade shows, trade advertising, press releases and newsletters were also employed By the late 1990s, California prune distribution in traditional food stores was very high, so outreach to bakeries, food manufacturers and restaurants was added to encourage the use of California prunes in new food products and on restaurant menus. In 2001, the CPB held a trade seminar in Tokyo where Dr. Daniel Fung explained the properties of prune puree in reducing the risk of pathogens in pre-cooked meat. Dr. Jimmy Keaton demonstrated that the warmed over flavor in pre-cooked meats could be reduced due to the antioxidants in prunes. We recently began promoting prunes in convenience stores, the fastest growing retail outlet, as convenient, everyday food. Several Japanese manufacturers have developed small packages just for this market. We urged the Japanese trade to incorporate the CPB’s “Prunes from California” logo on all their packages to increase awareness of the California origin.

PRICE

The price of Miki Prune Extract was about $20 US per 280 gram jar. Our challenge was to capitalize on the very positive image Miki had established for their product as a healthful, high quality, premium – priced health supplement without allowing that perception to become an inhibiting factor to frequent purchase of dried plums through retail stores. Miki was initially very concerned that our generic campaign would cheapen their product image and hurt their sales. By closely coordinating our promotional campaign launch with Miki and reassuring them we were only focusing on retail sales of dried prunes and wanted to maintain the healthful, high quality product attributes, we were able to allay their fears.

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Miki’s sales have not suffered and they remain very supportive of our nutrition research and communications efforts. The current retail price for 300 gram packages of California prunes ranges from $2.84 to $3.79 in supermarkets. While it is a premium priced food it is far cheaper than prune extract.

PROMOTION Market Research

The California Prune Board conducted market research in 1987 with financial assistance from the California Department of Food & Agriculture. Based on the results of this research a modest generic promotion program was launched. Marketing activities were expanded in 1988 with funding assistance from the United States Department of Agriculture. Each year since, a consumer survey has been conducted to measure product awareness, knowledge, purchase and usage information to evaluate the success of the promotion program in meeting program objectives. Target Audience Initially, a target audience of women aged 18 to 49 was established. Later this target was expanded to include women and men from 50 to 69 to capitalize on the rapidly aging Japanese population. Public Relations Communications initially consisted of press releases mailed to food and nutrition writers informing them that prunes are dried plums and they are grown in California. We next communicated how consumers can incorporate prunes in their diets through simple serving suggestions. More recently we have communicated the nutritional attributes of California prunes and how they can improve human health. The CPB pioneered national television publicity on food nutrition attributes with such positive sales results that many other foods have tried to emulate our success. Sales Promotion Since consumers were not familiar with prunes in dried form, sampling was an important part of our strategy. This was done through Japan Red Cross blood donation centers, obstetric/gynecology clinics, life insurance companies and in supermarkets and department stores. Recipe and nutrition leaflets were distributed with the product samples to educate consumers. Point-of-sale materials like demonstrator aprons or sweatshirts, posters, shelf talkers and recipe/nutrition leaflets were used with all in-store demonstrations. Advertising The initial advertising campaign was in popular women’s magazines. Later maternity and health magazines and national newspapers were added. When funding increased, spot television advertising was launched which proved to be the most effective advertising medium in Japan.

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The advertising creative initially showed the fresh plum and dried prune to help consumers understand that the beautiful plum is grown in California and dried into the prune. Easy serving suggestions were again incorporated in the print ads. Once consumers became aware of prunes and how to use them, the creative emphasis shifted to nutrition and health. The iron content of prunes was first featured for its ability to reduce the risk of anemia which is a common problem among Japanese women. Ads aimed at pregnant women emphasized that the iron, fiber and potassium in prunes were ideal for expectant mothers. In the mid-1990s the advertising message shifted to prunes as a source of potassium which helps offset the high sodium Japanese diet. This traditional diet can lead to high blood pressure which is common among older consumers and can lead to stroke and heart disease, two of the three leading causes of death in older Japanese people. In the late 1990s, the advertising creative evolved to “The Power of Prunes” using the iron, fiber, potassium and beta carotene as the reasons for prunes’ power. After the Tufts University study showed prunes were #1 in antioxidant power, we developed a new television commercial to emphasize the benefits of prunes in reducing heart disease and certain types of cancer. Last year we introduced a Japanese website to communicate with the trade and consumers. Education The CPB has worked with various school lunch associations for over 10 years to increase knowledge among school lunch nutritionists about California prunes. This has involved sponsoring educational seminars that have led to prunes being ingredients in many recommended school lunch recipes and to classroom instruction on the nutritional attributes of prunes. In this way we are increasing prune usage in schools today and sampling tomorrow’s consumers.

KEYS TO SUCCESS Today the Japan market is by far our largest export market, having more than doubled to over 16,000 metric tons since we began promoting there. I believe that the following were the keys to our success in developing the Japanese market were the following and that they would apply to other markets as well.

1. Industry Support 2. Market Research 3. In-Country Representative 4. Integrated Marketing Communications 5. Nutrition/Health Focus

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IPA 2004 DETAILS OF REGISTRANTS Conference Attendees 9 - 10 November Name Address Member Country Number

CALIFORNIA Delegate Attending

RETTAGLIATA, Tom and Lauren San Leandro CA Assoc Ashlock USA 1LINDAUER, Ken and Dorothy Red Bluff CA LRRanch USA 2KOOP, Hans and Barbara Kingsburg CA Sun Maid USA 1FAYE, Marc and Gerda Knight's Landing CA Sunsweet USA 1PETERSON, Richard & Dorothy Roseville Ca CDPB USA 1COLLIN, Gus & Barbara Orange Cove Sunsweet USA 1THIARA, Gary Yuba City Sunsweet USA 1SHROEDER, Don & Sharon Orange Cove NON USA 1DRISCOLL, Arthur Yuba City Sunsweet USA 1TAYLOR, John Yuba City Taylor Bros USA 1STEGGALL, Christopher Clovis CA CDPB USA 1 FRANCE AMBLARD, Christian,Vivienne,Victor Ste Livrade-Sur-Lot ComEco France 1VALAY, Philippe & Micheline Ste Livrade-Sur-Lot ComEco France 1DEL MAS Jean Michel Ste Livrade-Sur-Lot ComEco France 1CUISSET, Gaetan & Arlette Ste Livrade-Sur-Lot ComEco France 1DELCOUSTAL, Gerard & Beatrice Ste Livrade-Sur-Lot ComEco France 1LATOUR, Jacques & Josette Ste Livrade-Sur-Lot ComEco France 1VINCENT, Jean Michel & LEGER, Ghislaine Ste Livrade-Sur-Lot ComEco France 1BIASOTTO, Patrick & Marie Claude Ste Livrade-Sur-Lot ComEco France 1JAGUENEAU, J.Luc & Sophie Ste Livrade-Sur-Lot ComEco France 1SELSIS, J.Marc & Sophie Ste Livrade-Sur-Lot ComEco France 1CROUZET, Claude Ste Livrade-Sur-Lot ComEco France 1BISSIERES, Jean Pierre Ste Livrade-Sur-Lot ComEco France 1BOURRE, Jean Marie & Mme M.Laure Ste Livrade-Sur-Lot ComEco France 1 CHILE PIZARRO, Camilo Santiago Prunesco Chile 1CLARO, Hector Santiago Prunesco Chile 1MONDES, Federico Santiago Prunesco Chile 1 REPUBLIC of SOUTH AFRICA KRONE, Chris Tulbagh DFTS RSA 1SMIT, David and Anel Paarl DFTS RSA 1 AUSTRALIA GRANGER, Jeff and Jane Young NSW AusPrune Aust 1HOVEN, Henk and Ann Young NSW AusPrune Aust 1MARTE, Sue Young NSW AusPrune Aust 1v d AUE, Gilbert& Magdalena Galah Hill SA AusPrune Aust 1FAREY, Colin & Lorraine Angaston SA AusPrune Aust 1

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HELEY, Cheryl Wirrimah NSW AusPrune Aust 1GRANGER, Jim and Barbara Young NSW AusPrune Aust 1CALABRIA, Peter Yenda NSW AusPrune Aust 1PIVA, Trevor Yenda NSW AusPrune Aust 1TOSCAN, Tony & Joyce Darlington Point NSW AusPrune Aust 1DUFFELL, Roy & Judy Coleambally NSW AusPrune Aust 1VARDENEGA, Russell & Sonya Griffith NSW AusPrune Aust 1RATHJEN, Peter & Sue Young NSW AusPrune Aust 1DRAY, Delia Orange NSW AusPrune Aust 1DICKIE, Peter Yenda NSW AusPrune Aust 1HARGREAVES, Graeme Dunoon NSW Prunesco Aust 1OTTEY, Bill Young NSW Coach Driver Aust 1DWYER, John Sydney NSW AusPrune Aust 1CRONK, Kelvin Young NSW AusPrune Aust 1MENZIES, Roy Bathurst NSW AusPrune Aust 1MOONEY, Anne Orange NSW AusPrune Aust 1SMALL, Penny Sydney NSW Sydney Uni Aust 1CLIFTON, Peter Adelaide SA Food Science Aust 1ELLIS Chris Mildura Vic Sunbeam Aust 1JOHANSEN Peter Mildura Vic Sunbeam Aust 1SALVESTRO Flavio and Chris Bilbul NSW AusPrune Aust 2STICPEWICH Mary Wirrimah NSW AusPrune Aust 1Conference Interpreter Services Sydney NSW Interpreters 5Doug McLaren Adelaide SA Technicians 2Penny Small, Peter Clifton Speakers Tues 2Ann Mooney Michael Barkley Speakers Wed 2 ITALY LEVI, Alberto Modena CoopModensee Italy 1 66