Wine glut finally ends in California

[Don Giovanni]

Wine glut finally ends in California

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But grape prices are nudging up, wine sales have more than caught up with grape production, and, after years of watching bulldozers clear thousands of acres of Central Valley vineyards, growers' moods have clearly shifted.

"The tide is turning," said Nat DiBuduo, president of Fresno, Calif.-based Allied Grape Growers, during a standing-room-only presentation this week in Sacramento ballroom at the Unified Wine and Grape Symposium.

If grape prices rise in the coming years, wine shoppers won't necessarily see much change in retail prices. Grapes account for only a small fraction of the cost of a bottle, and it can take years for changes to trickle through the industry's production and distribution lines. Competition from low-cost imports is also likely to keep prices in check.

[Chris Hennes]

I admit, I'm not that familiar with this situation: what's been going on? Were low grape prices causing growers to put in more profitable crops?

[Don Giovanni]

I admit, I'm not that familiar with this situation: what's been going on? Were low grape prices causing growers to put in more profitable crops?

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Chris,

Yes, they pulled out many production vines and went with the PN wave etc...so now that quality fruit is produced yielding less tons , but better quality...now you have the event of the many frosts you got last year the supply is tight...not a bad thing...

[mike volker]

Just a guess, but i'd think the average consumer thinks a glut is great!

Best,

Mike

[Larry McGourty]

Hello from the Central Coast.

What happened is the Central Valley was simply over planted with a lot of cheap money --a typical California Ag practice. The grapes were more for raisin production than wine. It was simply not sustainable.

On the Coast, we had terrible weather the last couple of years and it has taken a toll on the vineyard crop. 2007 had frost and was dry, then 2008 was a repeat with at least a 30% to 40% reduction in yield on the Central Coast (where even Napa goes to get the good stuff). That pretty much wiped out the grape glut.

2009 is staring out really dry again. If current trends hold, we are going to be down again.

Paso Robles is still in a boom. The East side (high production area) is going to have some problems because they rely heavily upon irrigation and with out rain salt accumulation is beginning to be an issue. The West where we farm is mostly dry farmed. We have low yields and produce premium grapes. We are in the Santa Lucia Mountains along the coast. We usually get enough rain to get by.

For the consumer, because of the recession prices may hold in the wine market anyway