The majority of imported wines are now coming in bottled versus bulk wine as in past years. Some wineries are bottling foreign wine in U.S. wineries before going on to retail shelves.

“We cannot sit back and whimper about it, but must take the challenge head-on and produce the best quality wine grapes and wine while promoting the consumption of California wine.”

The oversupplies of wine and wine grapes are gone not only due to increased sales, but largely because more than 100,000 acres of vines have been ripped out, mostly in the San Joaquin Valley.

This year’s improved prices are no doubt due to a sharp decline in the projected grape crush, largely related to spring frost crop losses on the Central Coast and smaller crops expected from the North Coast due to shatter and other weather related issues. The latest USDA crop report projects a wine grape crush of 3.4 million tons, down 6 percent from last season. Wine grape bunch counts are reported to be down significantly from last year.

Demand for San Joaquin Valley wine grapes far outpaces supply.

“The increase in wine sales at the $10 and below prices has caused a tremendous interest by wineries to buy more grapes at higher prices,” DiBuduo said.  Cabernet Sauvignon, Red Zinfandel, Sweet Red, White Zinfandel, and even Merlot have been bought with strong interest and stronger pricing. Demand for all generic reds to be used as blenders has been good at higher pricing. SJV Chardonnay prices are also higher and “demand will consume every available white grape produced this year.”

Statewide, demand is good for red wine grapes like Cabernet Sauvignon, Petite Sirah and Zinfandel. Sauvignon Blanc is seeing a “slower than desirable play” by wineries at this time. However, DiBuduo anticipates demand will reappear later in the season (hopefully before harvest) as wineries see the lower availability of Chardonnay, Pinot Gris and other whites.

“One of the varieties we represent that is in very strong demand is Muscat Alexandria or other floral types that make up some of the new ‘sweet wines,’ such as the various ‘Moscato’ type wines,” he said.

Allied annually markets between 100,000 and 145,000 tons of Thompson seedless for the concentrate, brandy, sparkling wine and generic white wine markets. Prices have dipped to just $65 per ton over the past decade for Thompsons. This year DiBuduo believes it will reach $250 per ton, largely due to the loss of thousands of acres of Thompson vineyards over the past decade. This has bolstered the raisin market, which for the second year in a row will gross growers about $1,500 per ton.

Last season when the Thompson price reached about $225 per ton, Allied released about 30,000 tons requested by growers to make raisins. This year that went down to 16,000 tons, a reflection of the stronger green price as well as the fact that the crop is two weeks late, increasing the rains risk for field dried raisins.

North Coast premium wine grapes are not faring as well this season as the central valley and its value priced wine grapes. However, interest and prices are up over 2010, according to DiBuduo.

“We are not back to prices we saw in the 1990s and early 2000s, but we are definitely seeing buyers ‘buying’. We are also seeing competition once again for some varieties but at different price points than last year. We are confident that all of Allied's growers’ grapes in the North Coast will be sold and at better prices than in 2010 prior to the start of harvest,” DiBuduo said.