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California Growers Expect Smaller Yields; Large Inventory of Bulk Remains

August 2015
by Andrew Adams and Paul Franson
Several vineyards in Napa County Calif., suffered shatter because of cooler weather, pests and some light June rain.

San Rafael, Calif.—In the early spring, it appeared as if this year’s harvest in California might be wrapping up by the middle of September, as another warm winter triggered early bud break, prompting vines to push much earlier than normal.

Thanks to a cooler-than-normal May and unsettled weather in June, however, the reports of an early harvest are now being replaced with a sense of things returning to normal—or just a week or two early.

Some areas also experienced problematic set and cluster development because of windy, wet weather that also raised the risk of Botrytis and mildew—especially for later in the year. A couple of weak, low-pressure systems that came through the state around the Fourth of July brought more humidity and some thundershowers as well.

The Napa Valley Grapegrowers (NVG) reported in mid-June that a lengthy bloom period had created a “wide variability” in developing clusters. “Because of the variability in this year’s fruit set, crop thinning at the time of véraison will be even more important to even out the maturity of the clusters,” said Allison Cellini, NVG member and viticulturist at Cliff Lede Vineyards.

Eric Pooler, who oversees nearly 300 acres in Sonoma and Napa counties as the director of winegrowing for Boisset Family Estates, said 2015 is shaping up to be 10% to 25% lighter than previous years, depending on appellation and varietal. He said some severe shatter that reduced potential yields by more than 50% occurred in later blooming vineyards. “Although clusters are still starting to fill in, cluster structure is open and berry size is variable,” Pooler said.

At Gloria Ferrer in the Sonoma County side of the Carneros AVA, the lengthy bloom period did cause some shatter in blocks of Pinot Noir vines, but nothing significant. Winemaker Steven Urberg reported in July that everything looked good as the vineyard team worked to thin out the early crop and the clusters started véraison. “Coming off two large harvests, we have been extra careful this year to drop fruit to keep the crop load where we want it to produce the best quality,” he said. Weather can always change the situation, but Urberg estimated the first pick for sparkling wine would take place July 31.

Two of California’s most important growing regions, the North Coast and Central Valley, are moving in completely opposite directions. Prices continue to rise for grapes from Napa, Sonoma, Lake and other North Coast counties but have been plummeting in the interior.

“Last year we sold fruit (for) as low as $150 per ton in the San Joaquin Valley (SJV), up to $6,000 per ton in the North Coast.…Wineries are not buying SJV wine grapes at this time, and if they are talking, it’s not at prices that are sustainable for growers to continue farming wine grapes,” said Nat DiBuduo, president of the Allied Grape Growers, at the group’s annual meeting held July 9 in Santa Rosa, Calif.

Growers planted a few years ago when prices were high—some of them without contracts. “Today we are seeing contracts expire and not renewed. Wineries are indicating they are still dealing with a backload of bulk wine and plenty of contracted grapes.”

As a result, many growers are selling or pulling out their vineyards. One important factor is the strong demand for land suitable for nut crops in the San Joaquin Valley. DiBuduo said, “We believe up to 35,000 acres of grapes may be removed in 2015 for this reason, and two-thirds will be wine grapes.”

Steve Dorfman, a partner and trader with the Novato, Calif. based wine and grape brokerage The Ciatti Co., also remarked on the disparity between the North Coast and the San Joaquin Valley. The most recent Ciatti newsletter about the market referenced a “hangover of aging wine” that remains “a big problem for the California wine industry.”

That hangover is unsold, value-priced wine from the San Joaquin Valley, Dorfman said. Much of this wine came from the recent big harvests and consumer demand hasn’t grown in step with the excess production. The “pie” of available wine is just a little too big for the market.

Turrentine Brokerage president Steve Fredricks told Wines & Vines in mid-July that he thought the current bulk market was still around 20 million gallons, with perhaps just slightly more getting sold than added. He said wineries and other buyers are seeking quality wine to sell at retail for more than $10 per bottle.

Yields likely will be lower this year, but that will be offset by new acres, Fredricks said. He added there’s a good amount of coastal wine available on the bulk market as well, so a smaller harvest won’t affect the overall wine and grape market too much. “Because of the last few years people have been feeling like their inventory is an asset,” he said.

Fredricks said he’s a little surprised by the continuing strength of Napa County Cabernet Sauvignon, but he added one trend that’s been reversed from last year is demand for North Coast Cabernet in general is not as strong.

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