The 2014 profitability outlook for California wine grape growers is mostly bullish. Some producers could largely dodge the water bullet this year despite the state’s extreme drought.
“The future looks bright for California- and American-grown grapes and wine made from those grapes,” says California wine grape grower advocate Nat DiBuduo, president and chief executive officer of the non-profit Allied Grape Growers (AGG) grape grower marketing cooperative based in Fresno.
DiBuduo discussed the short-term future of California wine grapes during the signature “State of the Industry” session at the 20th annual Unified Wine & Grape Symposium in Sacramento, Calif. The late January event drew a record 14,000 people from 31 countries across the Western Hemisphere.
“The opportunity for grower and winery profitability should stay with us,” DiBuduo said. “We should have profitable farming conditions for wine grapes outside of the drought.”
AGG markets wine grapes for about 600 California growers across the state.
DiBuduo stopped far short from undermining the seriousness of California’s drought on the grape industry.
DiBuduo asked, “What is the top issue facing the grape industry?” His answer – “I think its water, and its water, and its water. (Grape) growers are practicing water conservation to the best of their ability.”
DiBuduo also painted a profitable picture for California wineries. The wine grape supply is in balance with grape demand.
“The answer is yes – we are in balance,” DiBuduo believes. “There is no shortage of wine or wine grapes at this point in time….A balanced supply is key to achieve profitability” for grape growers and wineries.
2013 California grape crush - 4,050,000 tons
On the supply side, DiBuduo guestimates the 2013 grape crush (crop) at about 4,050,000 tons; about 1 percent over the four-year average and the second straight year of consecutive 4 million-ton crops.
“Four-million tons may be the new average of the future (in California). It may be the new benchmark,” DiBuduo said.
DiBuduo broke down 2013 wine grape production by key growing regions. The North Coast crop was down slightly (540,000 tons) compared to 2012 (580,000 tons). Central Coast production also fell slightly to 500,000 tons (548,000 tons the previous year).
Production in the Lodi-Clarksburg area (northern San Joaquin Valley) was narrowly higher; about 1 percent (925,000 tons) above the 2012 figure of 916,000 tons.
Wine grape production in the southern San Joaquin Valley (Central Interior) jumped 6 percent – two million tons in 2013 compared to 1.88 million tons in ’12.
Looking at the California acreage planted to wine grapes, Allied pegs the figure at about 645,000 acres (bearing and non-bearing).
“Allied Grape Growers believes there are 550,000 acres of bearing wine grapes and 90,000 acres of nonbearing – for a total of 645,000 acres,” DiBuduo said.
“That’s a pretty big number and we’re still planting.”
DiBuduo arrived at this figure based on several factors: including two State of California estimates - 608,000 acres from the Department of Pesticide Regulation, and 546,000 acres from a voluntary survey of growers by the National Agricultural Statistics Services’ Sacramento Field Office, plus Allied ’s annual survey of California nurseries.
Those sources, plus discussions with grape leaders in the know, led to Allied’s 645,000 acre projection. These numbers and others are crunched by Allied Vice President Jeff Bitter.
In 2013, about 71 percent of all vines planted were red varietals with the balance of 29 percent white varietals, according to the nursery survey data. These percentages are very similar to estimates in recent year.
The 2013 top-planted red variety - and over the last handful of years - is Cabernet Sauvignon; 29 percent of all planted vines last year (2.9 million vines). On the white side, Chardonnay was the planted varietal leader at 13.7 percent, the survey results revealed.
DiBuduo says, “The majority of this acreage is under planting contracts. Wineries are telling growers that we need more Cabernet Sauvignon.”
Other key varietal plantings last year were Pinot Noir (12.5 percent), Zinfandel-Primitivo (10 percent), French Colombard 6 percent, and Petite Sirah and Pinot Grigio at 5 percent each. While plantings of Pinot Grigio and French Colombard have declined in recent years, the varietals are rising on the winery-grower preferred vine list.
Several years ago, the planting craze in wine grapes was the varieties Muscat Alexander and Muscat Canelli, as the palates of young adult wine connoisseurs found rapid favor with sweet dessert wines. Plantings of these varieties last year dropped significantly.
Top wine grape grower issues
DiBuduo jumped feet first into litany of issues facing wine grape growers. A long-time advocate of grower-winery contracts, DiBuduo urged growers and wineries to have specific maximum tonnage specifications in agreements, along with wording that clarifies the expected minimum and optimum brix (sugar) levels.
“Growers should understand up front what the quality standards are and stick with it.”
DiBuduo said last year was a poor year for harvest scheduling and timely grape deliveries to some wineries. The culprit was insufficient crushing and fermentation capacities at the winery level which caused problems for growers. He says grapes should be removed from the vine and delivered to the winery on a timely basis.
Since then, many wineries, especially the larger ones, have added crushing capacity and storage capacity.
“If you’re expecting for growers to put out money to develop vineyards under contract, the winery should have the capacity to handle those grapes.”
DiBuduo also addressed the need for expanded mechanization in the vineyard as good labor crews are more difficult to find and costly. Some new vineyards are designed for mechanical pruning versus hand pruning.
Speaking before the standing room-only crowd, the Allied leader took the University of California (UC) to task. DiBuduo said several job positions remain open for UC Cooperative Extension county viticulture farm advisor vacancies in the Central Valley (Fresno and Madera counties).
DiBuduo said half of the state’s wine grape production is grown in this region and yet without a single UC viticulture farm advisor. He urged UC to quickly fill these positions.
To make his point, DiBuduo chimed in, “If you asked me if we have red blotch disease in this area, we don’t have an advisor there to tell me if we have red blotch or not. We need to have a farm advisor in the Central Valley just like we have in other parts of the state.”
Drought's impact on grape vines
The grape leader then delved back on the issue of the drought and its potential cultural impact on wine grape vines this year and beyond. Drought can damage or limit vines in several ways.
- Functional root zone reduction
- Potential for bud necrosis
- Restricted spring growth
- Nutrient deficiencies and/or toxicities – toxicities can occur from not having adequate water to flush salt in the ground under the root profile.
- Vine stress caused by increased pest and disease pressures.
- Water quality concerns from combining water from different wells with high salt or no salt levels with surface water.
- Potential canopy and crop load reduction.
DiBuduo concluded his remarks by asking whether the California wine grape industry is headed for a surplus, balance, or shortage. A shortage in the near future is unlikely.
“We’re not saying to stop planting, as long as the wineries are working with growers and vice-a-versa to plant the right varieties in the right areas.”
A record 14,000 people attended this year’s Unified Symposium. The event was organized by the American Society for Enology and Viticulture and the California Association of Winegrape Growers.