What is in this article?:
- Record wine grape crush in California for 2012 should not dissuade growers from stepped-up production.
- "Factors that drive wine grape prices have been in the grower’s favor lately."
- "Don’t plant on speculation; get a contract for the grapes you’re about to produce."
BEN SLAUGHTER, left, with Correia-Xavier, and Jeff Bitter, vice president of operations for Allied Grape Growers in Fresno.
A record wine grape crush in California for 2012 should not dissuade growers from stepped-up production, a wine industry leader told those who attended a San Joaquin Valley Winegrowers Association Wine and Grape Industry Forum in Fresno.
It was a message that would have been unthinkable 10 years ago when the association had its beginnings, a time when growers, most notably in the central San Joaquin Valley, were removing scores of thousands of acres of grapevines to try to stabilize a glutted market.
But much has changed in that decade, including a decline in wine grape growing and wine production in Europe, said Jeff Bitter, vice president of operations for Allied Grape Growers, a statewide 600-member wine and concentrate grape marketing association.
“Factors that drive wine grape prices have been in the grower’s favor lately,” Bitter said. “The market is always looking for equilibrium and it feels like we are there, at least for now. I don’t think we’re entering a time of excess supply.”
But Bitter and others issued what has become a standard cautionary note to growers: Don’t plant on speculation; get a contract for the grapes you’re about to produce.
A shorter crop in 2011 meant California wine shipments are down slightly, by about 1 percent, compared to an increase last year of 6 percent. After the shorter crop, imports jumped by 600,000 tons in bulk wine, and imports continue to pose a threat, especially to producers of wine in the lowest price ranges.
Bitter said a record 3.9 million tons of grapes will be crushed into wine in 2012.
“While the California wine grape crop as a whole is estimated to be 10 percent above average,” he said, “the Central Valley wine grape crop was close to average.”
But the supply of grapes crushed for concentrate in the Central Valley plummeted in 2012. Central Valley yields for Thompson Seedless and Fiestas dropped by 27 percent and Rubired by 24 percent compared to the year before.
Also figuring into a spike in prices for white concentrate was a robust raisin market and lack of competition from other sources. Bitter cited non-availability of table grape strippings and said, “Apples for concentrate from China are now a non-issue.”
He predicts the white concentrate market will remain strong and the red concentrate market stable and dominated by California.
After at least two consecutive years of good returns for wine grapes generally across the state, Bitter remains bullish on the prospect for continued success for the industry’s growers and vintners.
Among the reasons he cited: A relatively weak dollar that thwarts imports and encourages exports; competition from alternative crops, notably almonds; re-establishment of a mid-market for wines selling at $7 to $14 a bottle; and, with the exception of a few “smaller” world producers like Chile and California, most wine growing regions are not expanding their acreage.