A big grape crush this year, impacting the growing economic powerhouse the California winery business has become,as reported by the Western Farm Press.
“The 4-million ton 2009 California grape crush has been called a shocker.
“It is. However, there is perhaps more unsaid from the crop.
“It may have been the second largest crush in history, topped only by the 2005 4.3-million ton crop that took at least two years to work off.
“The USDA-NASS report does not include grapes unharvested due to late harvest rains ruining on the vine. And it does not include undamaged grapes left hanging because they could not be sold. Not reported are similarly no-home grapes growers elected to custom crush, hoping to market them as bulk wine.
“Going into spring grower meetings, I was optimistic about this crush,” said Nat DiBuduo, president of Allied Grape Growers. Then imports started hitting. “When the Australian surplus Chardonnay hit the U.S., Lodi Chardonnay prices went down from $500 quoted earlier to $165.”
“Imports had a major impact on all wine grape prices in 2009.
“Industry Pollyannas counter with the fact average price for wine grapes increased 8 percent to $605 from 2008’s $561 per ton, boosting the gross value of the 2009 production by 32 percent to $2.24 billion.
“The substantial increase in total revenue generated by the 2009 crop was due much more to the big jump in production, rather than any price increases, Bitter says.
“The final crush report doesn’t include the grapes that weren’t purchased at all or were custom-crushed by growers, which in a stronger market, would have been reported,” explains Jeff Bitter, vice president of operations for Allied Grape Growers of California. “So, looking at the report you don’t see the true impact of the softening spot market for these wines.”
“The economy has also played a major role in wine grape prices in 2009 and the year before. Consumers are buying fewer premium wines in this recession, opting for value wines from places like Costco.
“This has sent shockwaves through the premium wine grape growing areas, where shipments were down 20 percent last year.
“DiBuduo said a major question is what will happen when prosperity returns to America. Will consumers who have learned to seek out value and quality at discount prices return to paying for higher priced wines just because they have the money? “Consumers have learned to find great wines at good prices. Will they go back to pre-recession buying habits when the economy recovers?”
“Although higher priced coastal grapes were left hanging last season, grapes targeted for the value priced wine market are in big demand.
“I could not find buyers for available Cabernet Sauvignon from the North Coast, yet I did not have enough Cabernet Sauvignon from the Central Valley to meet demand,” said DiBuduo.
“However, DiBuduo is not encouraging a resurgence of SJV Cabernet Sauvignon plantings. There is far too much market uncertainty to plant on speculation.
“Right now the only vineyards being planted are Rubired and Muscat.
“I am sticking to the story I have been telling for 10 years: Don’t plant any new vineyards anywhere in California without a winery contract,” DiBuduo said.”