What is in this article?:
- Wine grape prices still not sustainable for growers
- Sobering report
- Likely need for more grapes
- Variety acreage details
- Grower prices below break-even point in all areas of California.
- Napa prices $2,700 per ton lower than what it cost to produce them.
- SJV grapes closest to economic sustainablity after 100,000 acres pulled out.
- Demand for California wine continues to grow as grape shortages loom.
Likely need for more grapes
Taking the increasing sales trend into the future, DiBuduo hesitantly told the crowd that California likely will need more grapes to meet growing demand in the future.
“Unless something changes, there will be a significant shortage of California grapes for the California wine industry in the future."
Nevertheless, he still reminds growers “don’t plant without a contract, and planting contracts are being offered.” However, he added that growers often do not know what “minimum” price contracts actually mean in dollars until after harvest. The upturn in wine sales is also resulting in vineyards being planted on speculation.
“Planting has slowed down on the higher end of the market. Most new grape contracts are being offered in the Central Valley” for value priced grapes, he said.
However, he said there are former grape growers who want no part of a new vineyard, preferring to stay with more stable and profitable crops like almonds, walnuts and pistachios.
“There are still growers getting out of grapes” because of past low prices and market uncertainty, said DiBuduo.
DiBuduo’s rate of return numbers reflects why, even with a seemingly growing demand, growers do not want to plant grapes.
For Sonoma growers, Allied estimated 2009 grapes purchased from growers were undervalued by an average of almost $1,000 per ton. A similar figure separated what growers in Mendocino, Lake and Solano counties received for their crop last year and what the grapes were worth.
The spread narrowed to about $200 per ton in Monterey and San Benito counties. For the other coastal area of Santa Barbara and San Luis Obispo, the spread was about $600 per ton.
For the Lodi-Clarksburg area, the spread was $140 per ton over what growers received and what they deserved for their average yields. It was less than $100 per ton for the Fresno/Madera area.