What is in this article?:
- Almonds vs. grapes a growerâ€™s dilemma
- Sweet sells
- Tree nut crops like almonds are more likely to provide a better return than vineyards, but that could change as water scarcity drives up costs.
Two key speakers at a Fresno symposium on wine grapes found much to agree upon when it came to decision making on the almonds-versus-grapes choice and the need for grape growers to hit a sustainable gross return.
“I agree with (Ben Slaughter, an Accredited Rural Appraiser with Correia-Xavier Inc. in Fresno) that wine grape growers have to have a $5,500 to $6,000 per acre gross to justify planting a vineyard,” said Nat DiBuduo, president and CEO of Allied Grape Growers.
DiBuduo, who pronounced the state of California’s wine grape industry “healthy, growing and stable,” said a second consecutive crop that will nearly match last year’s more than 4 million tons crushed is not excessive though it is 10 percent above the average crush.
Among his hopes is that the size of the 2012 and 2013 crops will keep down imports, which both he and Slaughter expect will continue to challenge California growers.
Slaughter’s take-home points
For now, nut crops are more likely to provide a better return than vineyards, but that could change as water scarcity drives up costs, given that grapevines require less water than almonds.
Moreover, a strengthening dollar could make imports more affordable and nuts less valuable.
DiBuduo said scarcity of water on the Central Valley’s West Side could have some play in the choice of which permanent crop to plant there: almonds or grapes.
Slaughter pointed out that expansion of the Panama Canal by 2015 could significantly change both the import and export picture for California commodities that include wine. It would open the canal to ships that can carry 12,000 to 15,000 containers, compared to ships that today pass through the canal carrying 3,000 to 5,000 containers.
Use of those bigger ships, he said, could be good for export crops that include almonds and bad for crops competing with imports, including Central Valley wine.
Slaughter said there were regions of the state where excess grape tonnage was turned away by wineries or lower prices were offered in 2013, including Sonoma, Lake and Mendocino Counties.
Regarding Napa and Sonoma, he said, “Those guys are fine.” As for the Paso Robles region, he said scarcity of water could limit planting of vineyards there.
DiBuduo said wine grapes are “in supply/demand balance.”
DiBuduo said Valley varieties most in demand are Cabernet Sauvignon, French Colombard and Chardonnay.
He does not foresee an immediate shortage of wine, expects the spot market to soften and doesn’t expect higher grape prices to slow sales, though they could cut into winery margins.
DiBuduo said a lower price for Thompson Seedless grapes sold for crushing this year -- $235 per ton compared to last year’s $325 per ton – was a result of premature speculation of a low raisin price and talk of a crop that was estimated at 12 tons per acre, when the average was closer to 10.25 tons.