Challenging grape harvest reaches end


Issue Date: November 4, 2015
By Steve Adler
Winegrape grower Aaron Lange of Acampo stands in an eight-acre vineyard of aglianico grapes, a red variety native to southern Italy, planted earlier this year.
Photo/Steve Adler

A feeling of optimism prevails in many California winegrape-growing regions, despite a challenging year that saw a significant reduction in yields from those of the past three years.

As a result of the smaller crop size, wineries find they are better able to work through large carryovers from previous years that have been sitting in their tanks for several months. Most experts say wineries have worked through the entire 2012 carryover and a part of the carryover from 2013.

In a report released last week, Ciatti Global Wine & Grape Brokers of San Rafael noted that the recently completed California harvest is potentially one of the lowest-yielding vintages on record. The combination of unsettled spring weather, which caused grapes to shatter, plus the continued effects of the prolonged drought and consistently warm temperatures during the ripening period, all added to the smaller tonnages.

"This news will help correct some of the oversupplied varieties and further exacerbate supply shortages in the highly desired appellations and varieties," the report said, adding that the quality of wines and grapes across the state has been "outstanding."

"Given the tremendous amount of new acreage about to come online over the next few years, it could be that Mother Nature has done the industry a huge favor," the report said.

Ciatti said the sourcing and sales of many high-end grapes and wines sold domestically will be affected by the lighter harvest in coastal regions. The pricing of these wines and grapes could see another increase, as various lots come available for sale. Currently, pricing is at or near historic levels, the report said.

Also helping to bring supply and demand into closer balance has been the removal of an estimated 100,000 acres of less-productive vineyards in the southern and central San Joaquin Valley. Much of that acreage has been diverted to nut crops.

"South of Lodi, I think this was the most challenging year I've had in my 16 years at Allied Grape Growers," said Nat DiBuduo, president and CEO of the Fresno-based association. "There is more vineyard removal this year than last year. Growers are pulling out their vineyards if they have varieties that the wineries don't want any more. Others are selling their vineyards to growers who are purchasing the land, not the grapes, with the intention of planting nut crops."

DiBuduo said San Joaquin Valley growers who had contracts remained in a good position, but that was not the case for growers who wished to sell on the spot market or whose contracts had expired.

"We went through most of the season with no buyers at all," he said. "I have been getting calls from growers who had no market and for many of them, that market never materialized. There were a lot of grapes that went into brandy or the distiller program at less than sustainable prices."

DiBuduo said he expects the total California crop will be down from 2014.

"Overall, I think the crop will be less than last year's 3.8 million tons. How much less hasn't been determined. I think it will be between 3.6 and 3.8. With production off and crop value being off, I am seeing the overall value of the crop being less than last year," he said.

Although growers had to deal with a smaller crop this year, consumers worldwide continue to purchase more wine, with a growing interest in premium wines priced at $10 a bottle and higher. As the economy continues to recover, more people find themselves with discretionary income, some of which is being used on wine purchases.

"The economy has gone the way we predicted in the spring," said Rob McMillan, executive vice president of the Silicon Valley Bank wine division. "The U.S. has led what is a worldwide recovery; Europe has lagged a bit but is still coming along and China is a bit of a wild card, but has some fairly good growth as well. All of this has an impact on wine sales."

So do lower fuel prices, McMillan said, because that "shifts the money in a consumer's pocket from gas to other products," including wine.

"Consumers on the demand side, we have the baby boomers who are aging, but still represent the highest number of wine consumers, with the X generation also significant. The millennials are still down the path, but they are starting to consume more wine," he said.

While many unprofitable vineyards have been removed, there are also new plantings, with a focus on varieties that customers particularly want or unusual varieties in which some growers see an opportunity for more market growth. One example of the latter is reflected in an eight-acre planting of aglianico grapes, a red grape variety native to southern Italy, at LangeTwins Family Winery & Vineyards in Acampo.

"We are in a premium winegrape-growing region with a great future ahead of it," winegrape grower Aaron Lange said. "What we are doing is trying to think a little bit out the box and experimenting with new varietals. I think Lodi has a lot to offer. We are just trying to identify new varieties that will bring wine consumers into our winery."

Looking ahead, Lange said the focus during the next several weeks will be on the weather and the potential for significant rain.

"We are always very conscious of the drought, but right now we are trying to make preparations for this big El Niño monster that everyone says is coming," he said. "We are crossing our fingers and hoping that we get a nice, steady, wet winter and not a deluge all at one time. We are planting cover crops and looking to protect all the vineyards for erosion."

At Allied Grape Growers, DiBuduo noted that changes in the grape business fit into the evolution of San Joaquin Valley agriculture.

"Growers now are smarter than the previous generation. The previous generation saw themselves as grape growers, and the current generation is saying they are farmers and they will plant whatever type of crops will make them economically sustainable and keep the farm going for the next generation," he said.

(Steve Adler is associate editor of Ag Alert. He may be contacted at sadler@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.