Instead of changing business practices, the push for big wine now is to take over other businesses to stay afloat. Kendall Jackson wants to go into the hotel business and more events wrecking havoc on the locals. Tourism according to the just released Economic Development Board is only 6.5% of our economy.
California North Coast wine grape crop value drops by nearly half from fires, weather, pandemic
The value of the North Coast wine grape harvest dropped by 45% last year to $824.5 million, the lowest level in 16 years, according to government crop data released Wednesday.
The drop in total North Coast value — the lowest since the $739. 3 million crop of 2004 and behind the significantly weather-impacted $849 million haul of 2011 — reflects a one-third lighter crop that was actually picked last year and double-digit drops in prices paid. Yet the California wine grape crop overall was down only 13%, to 3.4 million tons, the smallest since 2011, and average pricing slipped 19%.
The combination of North Coast tonnage and pricing declines cut the region’s share of California wine grape crop value last year to 36%, compared with the typical 45%–55% range of the past two decades.
Preliminary figures in this year’s California Grape Crush Report reveal some of the significant local industry turbulence in 2020 from the confluence of late-season massive wildfires and early-season heat spikes coming amid the ongoing coronavirus pandemic and what had been a looming oversupply of higher-end grapes since 2018.
Compiled by the U.S. Department of Agriculture, the report is the first official look at tonnage brought into wineries during the fall harvest and prices paid, and it is a starting point for grape and bulk-wine purchase negotiations. The final report is set for release March 10.
But for some market experts the report is raising more questions than providing answers for farmers and vintners about the direction of the market amid the uncertainty of the coronavirus-influenced economy.
“We wonder if the depth of buyers on the (California Central) coast and North Coast is enough for all the fruit, given the challenges,” said Glenn Proctor, partner in San Rafael-based wine and grape brokerage Ciatti Co. “It’s still up in the air, because were in a position where we do not have a lot of water (for the 2021 season). It depends on who you talk to whether 2021 will be a big crop.”
At 340,150 tons, the size of last year’s crop from Sonoma, Napa, Mendocino and Lake counties was 29% below the five-year average and on par with tonnage from two decades ago, according to analysis of the report. Last year’s tonnage decline in the region was equivalent to 11.3 million fewer 9-liter cases of North Coast wine.
North Coast wine grape average pricing dropped by double digits last year: Napa, down nearly 21%, to $4,482; Sonoma, almost 16%, $2,362; Mendocino, 13.2%, to $1,474; and Lake, 23.5%, to $1,378. These declines were led by 21% declines for Napa and Sonoma cabernet sauvignon, the region’s largest variety. Napa cab fell by $1,686 a ton, to $6,186, falling below $7,000 for the first time since 2016, and Sonoma cab slipped for a second straight year, to $2,352 a ton.
“Lot of that (decline for cab) in Napa and Sonoma was because of market overage starting 2017 and the rejections of fruit because of the fires,” said Brian Clements, vice president and a partner in Turrentine Brokerage in Novato.
The smaller 2020 crop because of weather and fires plus reduced demand for high-end wines during the restaurant closures in the pandemic has helped bring the North and Central Coast supply of California’s premium grapes closer toward balance, he said.
Sonoma County tonnage compared with 2019 was down 36%, to 147,211, and Napa County’s was down 38.5%, to 98,262. That is on par with the estimates late last year from trade group Sonoma County Winegrowers late last year and early this year from Ciatti Co., a San Rafael-based wine and grape brokerage.
Mendocino and Lake counties were less impacted by smoke from the wildfires and had smaller declines, according to the crush report. Mendocino was down nearly 19%, to 55,161 tons, and Lake down 16.4% to 39,515.
“For the Napa and Sonoma cab high-end ridgetop vineyards, a lot of (those grapes) never got to market, so you have to take out (pricing) of the luxury end of that,” said Turrentine wine and grape broker and partner Mike Needham.
After a two-year lull in activity for signing new grape-purchase contracts in the North Coast, the buyers are back, but they’re largely not looking for $6,100-a-ton Napa County cab, according to Needham. Rather, cab grown on the Napa Valley floor is being sought for multiyear contracts at $3,500–$5,500 a ton, depending on location and other factors.
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