Contracted small farmers -> Export firms (with packaging facility and local logistics)-> export
- Individual farmers tend to just focus on farming and let individual exporters or trading firms take care of exports.
- The contract doesn’t have to be exclusive. Some farmers would leave a portion of their supply for other exporters or the domestic market
Export firm (with own farms, packing facility, and logistics) -> export
- The export firm may still have contractual farmers on top of their own farms. It may also buy spot deals to fulfill the demand
Individual farmers -> hire contractors (for pickers) -> rent packaging facility -> sell to exporter -> export
-Key trading points:
- The US grape market is a supplier market. Domestic buyers tend to visit the farm directly to get supplies from farmers.
- Directly sourcing from growers
- Target growers in the San Joaquin valley tend to have bigger land than the ones in the southern area.
- Build good relationships with individual growers as they tend to keep supplies even if they are contractually working with an exporting company. (Even exporting companies try their best to keep good relationships with these farms)
- The concept of FOB for growers is those that are picked up from the farm, not the port.