What is in this article?:
- Higher California wine grape prices expected to continue
- Price breakdown
- Sustainable prices for California wine grape growers will continue for at least the next three years.
- Many wineries believe the wine grape supply will be short for the next three to five years.
- Varietal grape prices have rebounded to levels last seen in the pre-surplus days in the mid-to-late 1990s.
- Consumer demand for wine has jumped 10 percent to 12 percent so far this year. If this growth trend continues, grape prices could trend higher.
Sustainable prices for California wine grape growers will continue for at least the next three years, said Jeff Bitter of Allied Grape Growers.
“I think California wine grape growers will enjoy good strong prices for the next three years or so. I don’t know if they’ll jump up another 25 to 50 percent (from current prices). That remains to be seen.”
Many wineries believe the wine grape supply will be short for the next three to five years. Over the last decade plus, California’s wine grape industry has mimicked a one-way yo-yo, with lots of downward action with little upward movement. Since last year, this has changed as wine grape growers now enjoy higher prices.
“We’re coming out of a period of a chronic wine grape surplus in California to a position today of balanced inventories,” said Bitter, seated in his leather office chair at Allied’s home office in Fresno, Calif., in mid May.
“In addition, we’re also on the cusp of a shortage. When you apply the law of supply and demand, these factors point to the economically sustainable production of California wine grapes.”
Bitter is a 15-year Allied Grape Growers’ veteran; the last decade serving as vice-president alongside Allied President Nat DiBuduo. Bitter is a fourth-generation Central Valley grape grower, who along with his wife April, owns and operates a 40-acre vineyard in Madera.
Allied is a 61-year-old, grower-owned cooperative which markets wine grapes for about 600 mostly small wine grape growers located across California. The co-op markets members’ grapes to wineries, but does not buy grapes from its members.
Looking at Central Valley wine grape prices, Bitter says varietal grape prices have rebounded to levels last seen in the pre-surplus days in the mid-to-late 1990s.
“We’re not necessarily talking about all-time price highs today for Central Valley growers. Growers are just barely able to make it for the first time in a decade,” Bitter said.
California’s estimated 4,600 wine grape growers continue to pinch their skin to determine if current higher wine grape prices are real or a mere dream. Pinch no more.
Wine grape growers watched prices fall like an anvil from 2000 to 2010 amid times of crop overproduction plus consumer cutbacks during the economy-stifling Great Recession. The premium wine grape industry experienced especially difficult times from late 2008 through 2010.
California growers produce about 10 percent of the world’s wine grape crop – about 3.5 million tons of wine grapes on average annually.