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Crush figures illustrate tough year for grapes

Issue Date: February 17, 2021
By Kevin Hecteman
Fewer grapes made it to wineries for crushing last year, according to a preliminary report from the U.S. Department of Agriculture—and farmers say the outlook for 2021 remains cloudy.
Photo/Fred Greaves

The COVID-19 pandemic, lack of rain, persistent oversupply concerns and a record-setting wildfire season conspired to wallop California winegrape production.

The 2020 California grape crush came in at just over 3.5 million tons, down 14% from 4.1 million tons in 2019, according to a preliminary report released last week by the U.S. Department of Agriculture. Red-wine grapes made up the largest share, with about 1.8 million tons, and white-wine varietals accounted for nearly 1.6 million tons. Table grapes and raisin grapes accounted for the remainder.

Jeff Bitter, president of Allied Grape Growers, said the tally "really does affirm what our position has been and what we've been saying for the last few months about last year's crop and the impact that would have—and has had—on the market for grapes throughout the winter."

Prices paid per ton also dropped, according to the report. The price for all varieties averaged $674.72 per ton, down nearly 17% from 2019. Red-wine grapes sold for, on average, $791.33 per ton, down more than 22%, while white-wine grapes declined 6% to $554.74 per ton.

Napa County grapes returned the highest average price, $4,577.62 per ton—but that was nearly a 21% drop from a year earlier.

Bitter said the statewide average price represented "the reality that there was a lot of grapes left to hang on the vine last year on the coast."

"Anything that got crushed gets reported," he said. "What didn't get crushed, by and large, in the state was coastal grapes. That's where we saw grapes that got left to hang on the vine and did not get crushed, and therefore did not get reported."

Dave Rosenthal, a Lake County grape grower and a member of the California Farm Bureau Board of Directors, attributed the price drop to smoke concerns arising from California's 2020 wildfires and to "hangover from the big crop a couple of years ago"; in 2018, the grape crush totaled 4.5 million tons.

"The industry has been oversupplied for a couple of years, and so prices had been falling somewhat already," he said. "Wineries weren't renewing contracts because they didn't need extra inventory."

Although Lake and Mendocino counties didn't suffer the smoke impacts of regions to the south, Rosenthal said the area did have vineyards "that weren't picked or the contracts were canceled."

"Quite a few of them got picked at a lower price," he said.

A short yield also helped reduce the 2020 crush. So what happened?

"Mother Nature," Rosenthal said. "There's a lot of studies and a lot of work done on what can contribute to a large crop and what can contribute to a small crop. Often, it's what the weather is like the previous spring, when the next year's buds are being formed."

In the case of 2020, he noted, low rainfall played a part.

Bitter said though he can't pinpoint anything in particular as being behind short yields, initial bunch counts for 2020 were lighter than 2019, especially for white grapes.

"A lot of times, your crop size has more to do with the weather during fruit bud differentiation the prior year than it actually does any particular weather patterns during the growing season," he said.

As for 2021, "who knows?" Rosenthal said.

"I don't know that anybody really knows what's going to happen with grape contracts for next year," he said. "We also still don't know how the whole COVID thing is going to sort out. And when are we going to get restaurants open again?"

Restaurants, tasting rooms and other sources of "on premise" wine sales have suffered during the pandemic, while "off premise" sales at grocery stores and other retail outlets have seen a boost.

Bitter said grape markets have improved since harvest.

"It never really got quiet after harvest for the Central Valley or the San Joaquin Valley," he said. "The market has still remained active. There's not going to be a lot of available winegrapes floating around for sale in the Central Valley, or even the northern valley up near Lodi, at all heading into the 2021 harvest."

The story for coastal grapes is different, Bitter noted, as most of those grapes generally go to wines priced at $10 per bottle and up.

"There's pockets of demand," he said. "There's certain varieties like sauvignon blanc that are in high demand, but by and large, there's still kind of limited demand for coastal grapes."

Rosenthal said too much production could set grape growers back again in the coming year.

"The danger is that we have a normal or above-normal crop this year, for whatever reason," he said. "All of a sudden, we have a lake of bulk wine, excess wine, again, and that's going to drive prices down even more. That's the big concern on the grape-growing side."

Bitter said that while farmers in interior grape-growing regions are mostly busy locking in contracts and putting production plans together, coastal growers and their customers will be engaged in "price discovery."

"I think the pricing that you're going to see buyers wanting to pay for coastal grapes is going to be different than the expectations of coastal growers," he said. "What is the market? What are these grapes worth? A grower needs enough to pay his bills, and a vendor needs to secure them at an affordable enough price to make their programs work."

That could make for a bumpy ride for Rosenthal and others growing winegrapes near the coast.

"If you're a winery and you're buying, you love it," Rosenthal said, "and if you're a consumer, you love it. But for us on the grape-growing side, it's a little scary."

(Kevin Hecteman is an assistant editor of Ag Alert. He may be contacted at khecteman@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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