Making a profit in a year that combined a promising start in the vineyard with a depressed market for the varieties he produces has continued to be a challenge for Central Coast Producer Steve Thompson.
He grows Cabernet Sauvignon, Petite Syrah, Sauvignon Blanc and Vermentino grapes on his 32-acre Coyote Moon Vineyard near Paso Robles, Calif.
As reported in the May issue of The Grape Line, he had about 30 percent of this year’s crop already sold as the season started, thanks to an existing multi-year contract. But, he was seeking buyers for the rest.
Also, he was doing what he could to minimize production expenses without sacrificing the quality of his grapes. He ended up selling most of his non-contracted grapes to a broker. And for the first time, he began selling his own wine, made from grapes he’s grown over the past three years.
“It’s been a struggle,” Thompson says of the 2010 season. “They’re haven’t been a lot of buyers out there, and those who are purchasing grapes are reluctant buyers — they’re not offering much.”
He says he has heard of offers to buy Cabernet Sauvignon for as little as $200 per ton. That compares to two or three years ago, when buyers were paying about $1,200 to $1,500 a ton in his area.
The closing of several smaller wineries in his area may explain part of the drop in grape prices, he surmises.
“They’ve been bought out by large corporations, which are bringing in cheaper-priced grapes and bulk wine from overseas.’
The situation has left him frustrated.
“The quality of our grapes is still there, and the costs to produce them are certainly still there,” he says.
In contrast to the weak market, his vineyards have turned in a strong performance this year, in part due to favorable weather conditions, beginning with nice rains last winter.
“We had a beautiful crop with a good canopy and good yields,” Thompson says.
Production of 4 tons to 5 tons per acre was up slightly from 2009 — and that was after dropping some fruit in mid-summer, as he usually does to maintain quality of the remaining grapes. Also, due to delayed maturity of the grapes, he dropped more fruit late in the season in an attempt to hasten ripening of the rest.
Thompson began his later-than-normal harvest the first week of October, finishing at the end of the month. This year’s harvest was interrupted by several rains, forcing him to bring in the sprayer to protect the grapes from powdery mildew.
To improve his profit prospects, he plans to reduce his Savignon Blanc acreage by grafting on better-paying varieties and, perhaps, adding more Petite Syrah.
“We can produce some superb Petite Syrah and we’re getting a price for it that pays our expenses, plus a little profit.”