This year's grape crush will begin shortly with the first wine grapes heading to wineries from Kern County in the Southern San Joaquin Valley in mid-August.
Not surprising, there are probably more unknowns than certainties as the crush begins.
What's for sure is that wine tanks are brim full from a record 4.3 million tons crushed last year combined with unsold 2003 and 2004 inventories. As a result, wine grape grower cell phones might as well be on silent from the lack of winery buying activity for grapes not on long term contracts.
Not surprising, this year's crop will be smaller, according to NASS. It almost had to be after ‘05.
The California NASS office is forecasting a table, wine and raisin grape crop of 6 million tons from 800,000 bearing acres of grapes, down 14 percent from last year's large crop.
Specifically, the wine grape forecast is for 3.20 million tons from 477,000 bearing acres, 16 percent below last season's record large crop. The raisin grape production on 240,000 bearing acres is forecast at 2.05 million tons, down 11 percent. Allied Grape Growers believe the raisin grape crop will be off even more than that, as much as 25 percent less than last year.
Allied's bunch count of Thompson seedless is the smallest in 20 years, and the crop will not even average 8 tons per acre, the cooperative's viticulturist/fieldmen predict. (About 30 percent of the raisin grape crop is crushed every year for wine or concentrate with about 70 percent made into raisins.)
The table grape crop is forecast for 750,000 tons from 83,000 acres.
The small crop would bode well for a 2006 wine grape price rebound if the huge 2005 crush was not hanging over the market like an unwanted house guest.
Making that houseguest even more unwelcome is the fact wine shipment growth rates are doing no better than last year, about 2 percent for the first quarter, according to the Gomberg Fredrikson Report.
Imports and exports of bottled and bulk wine played into that. California bottled wine exports out-dueled imports, up 6.4 percent versus imports down 0.7 percent. However, bulk wine imports were up a whopping 343 percent, according to Gomberg Fredrikson. Much of this is believed to be from Australia, which now has a wine glut in the wake of disappointing bottled wine exports to the United States.
Non-marketing activity as the crush begins is really no different than with other recent crushes. It has been this way for the past six or seven years, according to Jeff Bitter, vice president of Allied, the largest wine grape marketing cooperative in the state.
Wineries want to see the size of the crop coming from vineyards before contracting for grapes, believes Bitter, “Especially after last year when just about everyone was fooled by the size of the crop.
“However, I think there could be a shift in market activity in September when we believe buyers will realize the crop could be short,” said Bitter.
This year's crop will be a success if everyone finds a home for their grapes, almost regardless of price. Grapes were left to raisin on the vine last year for many growers, even those signed up with Allied, which had its largest grape revenue in decades, more than $63 million in ‘05.
Allied represents 600 growers and sold more than 257,000 tons of grapes — almost 7 percent of the total crop — to 100 different wineries.
In the wake of '05 when grapes were left hanging, Allied President Nat DiBuduo warns it may be time to plant more grapes to meet future demand.
“That's difficult to say when we look at the amount of grapes that went unharvested in 2005. (Nevertheless), we see the balance between supply and demand in sight. It has only been delayed by the 2005 crop,” said DiBuduo.
He points out that the recent California grape acreage report lists only 7,733 new wine grapes acres planted last year. This is less than 2 percent of the reported wine grape acreage.
California hit its peak bearing acreage in 2002 and “have since slipped slightly, with no solid indication estimated bearing acreage in the immediate future will exceed '02.”
According to DiBuduo this means, “We are no longer in a supply growth pattern, which is good for the short term, but potentially harmful as we look three to five years out.”
Ever the optimist, DiBuduo says there is “a light at the end of the tunnel — a pot of gold at the end of the rainbow — but how do we get there? How do we survive to reach the Promised Land? We cannot turn vines off and on until we get to the better times.”
“We need to continue to produce quality grapes for a particular winery program and get paid fairly for it,” he said.
For the present, DiBuduo offered an overview of the key varieties in the state:
Cabernet Sauvignon: The crop looks slightly larger than average, but not as big as '05. There is still more Cab available than the industry needs. However, there has been some interest early this season for high end Cabernet Sauvignon in Napa and Sonoma.
Merlot: Fair size crop facing a larger carryover from '05. Wine sales will be challenged to consume '05 and '06 crops on a timely basis.
Chardonnay: Looks significantly lighter than last year.
Zinfandel: Crop used for red and white Zin also is slightly lighter.
Floral Varieties: Appear to be off from last year, and Allied has seen some good demand for these varieties early.
Pinot Noir and Riesling varieties: It does not appear the '06 crop will match winery demand.