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Grape, wine market ‘balanced’ after third-largest crop

Jeff Quackenbush, Business Journal Staff Reporter
Thursday, January 17, 2013, 6:06 pm
Categories: Agriculture, Industry News, North Bay News, Sonoma Report, Sonoma Report newsletter 2nd-level stories, Top News Stories, Wine Industry Business Journal | No Comments

SANTA ROSA — While the 2012 winegrape harvest in Sonoma County appears to have been among the county’s largest ever, the market for grapes continues to be active early in the 2013 buying cycle, yet rising costs and uncertain ability to increase retail prices is crushing wine producer margins, according to industry supply and finance experts at a major seminar today.

“It’s been a turbulent two to three years in the wine industry,” said Glenn Proctor, partner of Ciatti Co., to an audience of several hundred at Sonoma County Winegrape Commission’s Dollars & Sense Seminar in Santa Rosa.

The 2012 winegrape harvest in Sonoma County could weigh in at 214,000 tons, which would be the county’s third-largest ever, behind 216,000 in 2006 and 230,000 in 2005, according to Mr. Proctor. The San Rafael-based wine and grape brokerage built its estimate on discussions with buyers and sellers.

The commission in October figured the harvest could weigh in at roughly 230,000 tons.

Ciatti is estimating the California winegrape crop was 3.85 million tons last year, which would be the stat’e largest on record, and other figures range from 3.7 million to nearly 4 million tons. Whose is more correct will become clearer with the highly anticipated release of official tallies in the California Grape Crush Report on Feb. 8.

It is expected to have been a huge crop for 2012 Sonoma pinot noir, according to Mr. Proctor. The estimate of 36,000 tons would be second-largest crop for the variety in the county, trailing 38,000 tons crushed in 2006. That could go as high as 40,000 tons, based on a number of grower reports of picking six tons an acre and some nine, rather than the typical four.

For chardonnay, the county’s largest winegrape variety, Ciatti projected the 2012 crop to be 71,500 tons. That would be just behind big vintages of 73,000 in 2009 and nearly 74,000 in 2009 and well above the 52,000 tons in 2011.

The surge in crop yield last year for Sonoma County pinot noir would make the variety a contender with cabernet sauvignon for second place. At an estimated 40,000 tons, the 2012 Sonoma cabernet sauvignon crop would trail big years in 2009 and 2005.

Ciatti’s projection of 19,000 tons for the size of the 2012 Sonoma merlot crop would be the largest since 2007, but tonnage has been declining as vines has been removed, Mr. Proctor said. A 15,000-ton figure for 2012 Sonoma zinfandel would put the crop size in line with the large vintages of 2005, 2006, 2007 and 2009.

The good news for wine producers is that prices for chardonnay and cabernet sauvignon grapes in Sonoma and Napa counties not under long-term contracts are moderating after 40 percent to 50 percent spikes in the past three years, according to Mr. Proctor.

“It is better, but it may not be getting any easier,” Mr. Proctor said about the market.


Link to article: http://www.northbaybusinessjournal.com/67669/sonoma-co-grape-wine-market-balanced-after-third-largest-crop/

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