Total Production & Yield

215

172

175

142

103

48

168

170

93

205

40

80

120

160

200

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06

2.4 1.2 2.0 2.4 1.6 2.2 2.3 .7 1.4

Average Bearing Acre Yield

Tons

(000)

Proj.

2.4

No. 151 February 2007

This Annual Report was developed in accordance withthe Agricultural Marketing Act of 1937 to provide you witha summary of California Dried Plum Board activities forthe 2005/06 marketing year. Special recognition shouldgo to the members and alternates of the Board andCommittee shown on page 8 and the various subcommitteeswho have devoted many hours to California prune industrymatters during the course of the year.

PRODUCTION AND SUPPLYBearing prune acreage remained unchanged at67,000 acres in 2006. Non-bearing acreagedeclined slightly to 7,500 acres in 2005 versus8,000 acres in 2003. (The CDPB did not fund anon-bearing acreage survey in 2004).

Prune Acreage

86 86

7472 70 67

82 83 83

67

21

26

22 1511 9 8 8

0

10

20

30

40

50

60

70

80

90

100

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06

Acres

(000)

Bearing

Non-Bearing

Prune Tree Sales

324320

230

297 270

162

173

530

300

325

315

0

100

200

300

400

500

600

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07

Trees

(000)

Proj.

Prune tree sales, reported by nurseries, increasedby 67% to 270,000 trees in 2006 after dropping tothe lowest level in 2005 (162,000) since this surveybegan in 1990. The projection for 2007 sales was324,000 trees, which would represent a 20%increase.

2005 prune production increased by 95% to 93,233tons from the smallest crop in 86 years, but the2005 yield per acre of 1.4 tons was still 36% belowthe pre-2004 5-year average of 2.2 tons due toadverse weather conditions. The 2006 crop isprojected by packers to reach 170,000 tons, whichwould still be 3% below the pre-2004 5-yearaverage of 174,450 tons.

Carry-In Inventory

126

6971

60

22

65

101

64

102

26

10

30

50

70

90

110

130

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06

Carry in Desired

(000)

Tons

Desired

The 2005 carry-in of 25,931 tons was 62% smallerthan the 2004 carry-in of 68,833 tons but 17% largerthan the reported 22,140 ton 2006 carry-in.

When combined with 2005 production of 93,233tons, the total supply was 119,164 tons, which wasonly 3% larger than the 2004 supply. The projected2006 total supply of 192,140 tons would represent a61% increase from 2005.

Natural Condition Supply

225

226

116

239226

119

268

192

301

236

110

130

150

170

190

210

230

250

270

290

310

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06

Tons(000)

The average grower return per ton decreased by 1%to $1,474 per ton for 2005 according to theCalifornia Agricultural Statistics Service. Theaverage price for the 2004 and 2005 crop years was88% higher than the previous 5-year average of$789.

Average Grower Returns/Ton

1474

1496

810726

883

775

764 772

861

725

825

925

1025

1125

1225

1325

1425

1525

1625

'97 '98 '99 '00 '01 '02 '03 '04 '05

199 99 165 203 135 168 47

Salable Production

$

162 93

Average Returns / Bearing Acre

1722

1162

1782

1776

917

1860

20642119

1047800

1100

1400

1700

2000

2300

2600

2900

3200

3500

3800

'97 '98 '99 '00 '01 '02 '03 '04 '05

$

2.4 1.2 2.0 2.4 1.6 2.2 2.3 .7

Salable Yield

1.4

The average return per bearing acre nearly doubled(+97%) due to the increase in yield per acre.

SHIPMENTSTotal 2005 shipments of 105,583 processedcondition tons were 11% higher than 2004shipments which had been dramatically reduced dueto inventory limitations. Domestic shipmentsincreased by 29% while exports declined 8% due

to aggressive competition from France, Chile andArgentina. Exports as a percent of total shipmentsdeclined over 8 points to 40.6%.

Total Shipments

176 163 167

95

173

106

173178

155

86

928795 96

90 88

4963

8782

80

4346

67778176

40

60

80

100

120

140

160

180

200

'97 '98 '99 '00 '01 '02 '03 '04 '05

Tons(000)

Total

Domestic

Export

Shipments of pitted prunes increased by 2% versusyear ago while whole prunes increased by 33%.Pitted prune shipments as a percent of totalshipments declined 6 points to 64%. Pitted prunesaccounted for 75% of exports and 57% of domesticshipments.

Shipments - Whole & Pitted

178

163 167

173173

95

155189

106

28 3869

5966 60

84

54

63

105112

67 68

11398104 101 110

20

40

60

80

100

120

140

160

180

200

'97 '98 '99 '00 '01 '02 '03 '04 '05

Tons(000)

Total

Whole

Pitted

U. S. Prune Imports

233.6 184.2

7990.3

4237.8

992.8

28.9460.7243.4493.4

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1998 1999 2000 2001 2002 2003 2004 2005 2006

MT

(4 months)

The increasing availability of California prunes ledto a 47% drop in U.S. prune imports (excludingprunes in brine) last year to 4,237.8 MT. For thefirst four months this year imports dropped anadditional 43% to 992.8 MT with 95% of theimports coming from Argentina.

2

3

Imports of unfermented prune juice (includingprune concentrate converted to single strength juice)declined by 20% last year to 19,762.8 kiloliters (theequivalent of about 7,050 short tons of prunes). Forthe first four months this year 8,546.9 KL (about 3,050short tons) has been imported from Chile, France,Germany and China, an increase of 37%.

U. S. Prune Juice Imports(Unfermented)

24658.5

4756.4

2092.93615.0

1945.5

6704.57715.5

19762.8

8546.9

0

5000

10000

15000

20000

25000

30000

1998 1999 2000 2001 2002 2003 2004 2005 2006

KL

(4 months)

STRATEGIC PLAN

The California Dried Plum Board recently completeda Comprehensive Industry Strategic Plan (CISP) thanksto the facilitation and compilation of Ms. Mary Moosof Gordian Marketing, Inc. Representatives from allfacets of the industry as well as CDPB staff, agencyand consultant resources met for three work sessionsto develop a comprehensive and coordinated globalstrategic plan that would:

Support the long-term health of the industryRepresent areas of common interestProvide benefits to all industry segmentsBe used to make informed decisions aboutfunding and programming

From these sessions the following mission statementswere developed.Industry: To sell more California dried plums to morepeople worldwide.CDPB: To protect and support the health, growth andintegrity of the California dried plum industry.

It was agreed that the focus of the CDPB’s activitiesshould be:

Generic Promotions: Communicate differentiatedbenefits and encourage large-scale acceptance ofCalifornia dried plums

Research: Market research for measurement;production research to improve grower efficiency;nutrition research to identify positioningopportunities and value messagesTrade Policy: Protect the interests of theCalifornia dried plum industry globallyIssues Management: Protect the health of theindustry

The most critical issues facing the California prune/driedplum industry over the next five years were identified as:

Shrinking demandCompetition from exportsIncreased production costsDifficulty of marketing dried plums

The strategic planning process revealed the followingopportunities and strategies:Opportunity 1: Export Marketing

Strategy 1: Block foreign competition from takingadditional market share caused by inventory shortagesby employing marketing tactics that supportrelationships with retailers but don’t indirectly benefitforeign competitors.

Opportunity 2: Economic FactorsStrategy 2: Production ResearchIncrease grower efficiency and differentiate the productfor a competitive advantage.Strategy 3: New Applications and UsesIncrease demand through new value-added products soldinto industrial markets.Strategy 4: CommunicationsInfluence demand through communications of thedifferentiated value of California dried plums.

If you would like an electronic or hard copy of the strategicplan, please contact the CDPB office.

DOMESTIC MARKETING

Public RelationsThe public relations focus in the U.S. continued tobe on positioning dried plums as the #1 fruit fordigestive health due to their sorbitol, fiber,antioxidants and potassium. This positioningextends beyond consumers’ traditional association

of prunes with laxation to encompass lifestyle andwell-being.

Consumer public relations activities targeted generallyhealthy women who rely on processed, ready-to-eat/prepared foods for themselves and their families, whoare motivated by wellness and diet prone.

Our communication goals were to:

• Create and build awareness about theimportance of digestive health among:

– Consumers

– Media

– Health Professionals

• Drive awareness that California Dried Plumsare the essential component to digestivehealth

• Position the California Dried Plum Boardas the number one resource for informationon digestive health

The program strategies in 2005/06 were to:

• Continue to build scientific credibility fordigestive health gained in year one via aDigestive Health Summit

• Spark research interest among scientificcommunity

• Enhance tools created in year one• Expand communications to target audiences

4

Media outreach focused onour spokesperson, LeoTreyzon, MD, agastroenterologist at theUCLA Center for HumanNutrition who was featuredin broadcast, print and Internetcoverage. Dr. Treyzonemphasized “The DigestiveHealth Diet” consisting ofCalifornia dried plums andother colorful fruits and

vegetables as well as dietary sources of vegetable protein,fiber, calcium and Vitamin D. Dried plums were positionedas the number one fruit for digestive health.

Dr. Leo Treyzon

Influencers like dietitians, nutritionists, doctors andnurses are essential to spreading the dried plummessage to thousands of consumers. Digestive healthseminars were held at the American DieteticAssociation (ADA) in October 2005 and the Instituteof Food Technologists (IFT) in June 2006. The CDPBexhibited and distributed product samples andmaterials at both shows.

The Digestive HealthOrganization (DHO) website(www.digestivehealthorg.com)launched last year wasexpanded to share knowledgeabout digestive health withhealth professionals. Inaddition, a new website waslaunched to spread thedigestive health message toconsumers atwww.Tummywise.com and aBe Tummywise brochure wasdeveloped. The yearconcluded with a nationalsurvey to learn howconsumers definegastrointestinal health, whatthe key attributes are andwhat their level of GIknowledge is. The survey results were then used onthe DHO website and to develop press materials.

Nutrition Research

Activities of the Nutrition Research Programcontinued to emphasize digestive health. Incoordination with the Board’s Food TechnologyConsultant, Nutrition Advisory Panel (NAP) memberDan Gallaher, Ph.D. spoke on ‘What Is Good IntestinalHealth and How Can We Get It?’ at the annual meetingof the Institute of Food Technologists. Answers tocommon consumer questions about the role of dried plumsand digestive health are now posted onwww.Tummywise.com and the “White Paper on DriedPlums and Laxation” is available onwww.digestivehealthorg.com as a health professionalresource.

Nutrition research is receiving international interest andexposure. An overview and summary of the Board’ssponsored research was presented at the

TummywiseBrochure

5

International Prune Association meeting in Sardiniain May. Researchers from Harokopeio University(Greece) expressed interest in conducting research onprunes and satiety. Christine Wu, Ph.D., presented aposter on dried plums and oral health at the meetingof the International Association for Dental Researchheld in Australia.

The Nutrition Advisory Panel held its yearly meeting withthe Nutrition Subcommittee to evaluate current researchactivities and discuss future opportunities. ConnieRodgers, Ph.D., National Cancer Institute Laboratory onTumor Immunology and Biology has joined the Panel.

Research projects carried over into 2005/06 include:

• James Joseph’s, Ph.D. initial study on dried plums’effect on brain aging in rats is completed; however,Dr. Joseph continues to assess at no cost the anti-inflammatory activity of fresh plum juice in amouse cell model.

• Christine Wu, Ph.D., University of Illinois,Chicago, has added more subjects to her researchon the role of dried plums in oral health and thesuppression of cariogenic bacteria.

• Bahram Arjmandi, Ph.D., RD, began his USDA-funded clinical trial at Florida State University toinvestigate whether dried plums can reverse boneloss in postmenopausal women. The Board hasprovided snack packs for the study and fundingfor several measurements of oxidative stress todiscover dried plums’ antioxidant and anti-inflammatory role.

Other activities of the Nutrition Research programincluded:

• Supporting nutrition communications efforts inconsumer public relations to increase generalawareness of digestive health as an aspect ofoverall health and well-being.

• Participating in the development of acomprehensive strategic plan for the dried plumindustry.

• Meeting, prospecting and networking with otherinstitutions and government agencies to leverage andextend the nutrition research program activities.

• Preparing monthly updates including research itemsof industry interest.

Industrial Program

The California Dried Plum Board’s industrial/food serviceprogram is focused onthe use of various formsof dried plums as foodingredients. In prioryears the ingredientfocus was on bakedgoods and meatproducts. The benefitsof dried plums used inthese products werebroad and includedmoisture retention, fatreplacement, caloriereduction, antimicrobialprotection and food safety. More recently these multiplebenefits were narrowed to focus on how dried plums cancontribute to extended shelf life and shelf stability in meatand bakery products. This message was conveyed usingvarious communications tactics.

Specific projects in 2005/06 included:

• Two new trade ads promoting the shelf life benefitsof dried plums in meat and bakery products

• Trade advertising in Food Product Design andCulinology magazines

• Supporting technical bulletins summarizing driedplums’ shelf life benefits

• The completion of technical and applicationsresearch on dried plums’ use in 100-calorie snackfoods

• Press releases describing dried plums’ shelf lifebenefits

• Participation at the annual Research ChefsAssociation convention and the Institute of FoodTechnologists annual convention

Trade Baking Ad

INTERNATIONAL MARKETING

The California Dried Plum Board was granted $2,700,000in Market Access Program (MAP) support by USDA’sForeign Agricultural Service in 2005/06. Due to a secondshort California prune crop, promotional activities werefocused on building awareness of the benefits of buyingCalifornia prunes rather than prunes from other originswithout stimulating retail sales.

JapanDue to the continuing tight inventory situation, short-term demand stimulation activities like spot televisionadvertising and television publicity were limited. Thefunds were used instead to remind consumers aboutCalifornia prunes and reward retailers who did notreplace California prunes with prunes from Chile orFrance. This was done through in-store samplingdemonstrations, a consumer premium campaignoffering prizes for selected entrants and a supermarketdisplay contest. New point-of-sale materials wereproduced for use during these retail activities toincrease awareness of California prunes. School lunchseminars encouraging the use of California prunes inofficial school recipes were continued and asupermarket survey tracked inroads of foreign prunes atretail.

ChinaTrade show participation helped reassure buyers thatCalifornia continues to support its products despiteinventory limitations. A community promotion inShanghai conveyed prune nutrition education to 3million consumers. Pitted prune samples weredistributed at gyms in both Beijing and Shanghai and on

Southern China Airlinesflights. Advertising inhealth and women’smagazines and onbillboards in Beijing,Shanghai and Guangzhouincreased awareness of thenutritional attributes ofCalifornia prunes.

Magazine Ad

IndiaActivities in India focused on developing and printingnew point-of-sale materials and sampling promotionsin supermarkets, shopping malls and theaters.Publicity coverage was achieved in popular magazinesand local newspapers. Participation in several tradeshows, a Chef Awards ceremony and health seminarsdemonstrated the nutritional attributes and usageversatility of California prunes.

United Kingdom“Choose California –The Quality Choice”was the promotionaltheme in the U.K. ascommunicated in mediaoutreach and retailerpromotions like anarticle in Sainsbury’sMagazine and onTesco’s e-newsletter

and website. Sponsorship of the women’s EnglandNetball team continued to provide magazine publicityand sampling opportunities. The CPB also co-sponsored “The Big Toddle”, a walk for toddlers,parents and grandparents benefiting Barnardo’sChildren’s’ Charity.

ItalyA van decorated withbold California prunegraphics traveled tocycling, running andother popular eventsthroughout Italy. Thevan contained a smallelectric car whichattracted the media andthrongs of consumersas it stole the show at these events. Product samplesand literature were distributed and contest entries werecollected to win environmentally friendly prizes. Anew Italian website was launched and a “ChooseCalifornia Quality” brochure was distributed to thetrade via mail and a booth at MIA of Rimini trade show.

Choose California Brochure

Electric Car

6

Greece

Generic promotions began in Greece last year with atrade press luncheon in Athens, one-on-one consumerpress meetings, and development of Greek pressmaterials and POS materials.

Please note that the California Dried Plum Boardis a recipient of Market Access Program (MAP)funds from USDA’s Foreign Agricultural Service.The U.S. Department of Agriculture (USDA)prohibits discrimination in all its programs andactivities on the basis of race, color, national origin,gender, religion, age, disability, political beliefs,sexual orientation and marital or family status. (Notall prohibited bases apply to all programs.) Personswith disabilities who require alternative means forcommunication of program information (Braille,large print, audiotape, etc.) should contact RichardPeterson at (916) 565-6232.

PRODUCTION RESEARCHThe California Dried Plum Board funded a variety ofproduction research projects in 2005/06 as well asmembership in theMinor Crop FarmerAlliance and theI m p l e m e n t a t i o nWorking Group at atotal cost of$159,436. DonaldVossler served asChairman of theCDPB ResearchSubcommittee for 23years until his deathon August 27, 2006. The report on the 2005/06 pruneresearch projects was dedicated to Don for his yearsof dedicated service to the industry and his leadershipin production research. For a copy of this report,contact the Board office. Gary Obenauf, President ofAgricultural Research Consulting, coordinated allresearch activities.

UC Guide Offers Plum Good Info for Growers

In the newly released University of California SeasonalGuide to Environmentally Responsible PestManagement Practices in Prunes, growers can findguidance on some of prunes’ major pests such asaphids and peach twig borer.

Don Vossler

7

The guide also contains other valuable information tohelp prune growers protect their crop and avoidunnecessary insecticide spraying. The seasonal guideoutlines activities thatneed to be carried outbased on the cropgrowth stage. Alsoincluded are lists ofe n v i r o n m e n t a l l yfriendly insecticidesand broad-spectrumpesticides that haveimplications forwildlife and theenvironment.

A free copy of theguide is available toCalifornia prune growers and processors by contactingthe CDPB office.

2005/06 BOARD INCOME &EXPENSESThe 2005/06 Board statement of income andexpenses is shown below. These representaudited figures verified in the Board’s annualaudit by Hood and Strong, Certified PublicAccountants.

INCOME:

Carryover Funds $ 492,390Production (Assessable tons only) 93,441Assessment Rate per ton 32.00Assessment Income 2,990,105Misc. Income (Interest, etc.) 13,438

TOTAL INCOME $ 3,495,933

EXPENSES:

Operating Expenses $ 209,767Consulting Services 116,524Crop Estimating Services 32,000Production Research & Coordination 184,584Public Relations 710,274Advertising 0Consumer Research 66,510Sales Promotion 29,535International Market Development 1,012,082Administration 407,081

TOTAL EXPENSES $ 2,768,357

FUNDS CARRIED OVER $ 727,576

ADDRESS SERVICE REQUESTED

3840 Rosin Court, Suite 170Sacramento, CA 95834CDPB (916) 565-6232PMC (916) 565-6235FAX (916) 565-6237E-mail: pconine@cdpb.orgWebsite: www.californiadriedplums.org

The California Dried Plum News is published bythe California Dried Plum Board (CDPB) &the Prune Marketing Committee (PMC)

Tim Smith, Chairman, CDPBJon Lavy, Chairman, PMCRichard Peterson, Executive Director,CDPB & PMC

2005/06 MARKETING YEARCALIFORNIA DRIED PLUM BOARD PRUNE MARKETING COMMITTEE

DISTRICT/AFFILIATION MEMBERS ALTERNATES

PRODUCERS1 Vern Vereschagin Keith Larrabee (c)2 Ron Giovannetti W.C. “Buzz” Sowden3 Jaswant Bains Neill Mitchell4 Ken Lindauer Al Lengtat5 Jon Lavy Dan Bozzo6 Steve Danna Ranvir Singh7 Chris Steggall Lucille DemetriffCo-op Gus Collin Bob Amarel, Jr.Co-op Ren Fairbanks Jill CenedellaCo-op Brendon Flynn Joe TurkovichCo-op Bob Kolberg Phil FilterCo-op Hans Smith John RehermannCo-op Tim Smith (a) (c) VacantCo-op Donald Vossler (b) Vacant

MEMBERS ALTERNATESPRODUCERS

Vern Vereschagin Keith Larrabee (c)Ron Giovannetti W.C. “Buzz” SowdenNeill Mitchell VacantKen Lindauer (b) Dorothy LindauerJon Lavy Dan BozzoSteve Danna Ranvir SinghLucille Demetriff Dwayne CardozaGus Collin (a) (c) Bob Amarel, Jr.Ren Fairbanks Jill CenedellaBrendon Flynn Joe TurkovichBob Kolberg Phil FilterHans Smith John RehermannTim Smith VacantDonald Vossler Vacant

PROCESSORS PROCESSORSCo-op Arthur Driscoll (c) Harold UptonCo-op Dane Lance Steve Harris (e)Co-op Harold Schenker (c) Mark DalrympleCo-op Gary Thiara (c) Bruce NortonIndependent Mark Mariani (c) George Sousa, Jr.Independent Don Soetaert (d) David MazzolaIndependent Kent Mannee Rick Wilbur (c)

Mark Dalrymple Bruce NortonArthur Driscoll (c) Harold UptonHarold Schenker (c) Dane LanceGary Thiara (c) Steve Harris (e)Mark Mariani (c) George Sousa, Jr.Don Soetaert (d) David MazzolaRick Wilbur (c) Kent Mannee

PUBLIC MEMBER PUBLIC MEMBER

(a) Chairman, (b) Vice Chairman, (c) Executive Committee Member, (d) Replaced Ron Sandage and (e) Replaced Steve Riccardelli

Karen Berke Vacant Karen Berke Vacant

8