After three consecutive years with early and late rains and hard frosts in some areas negatively impacting winegrape production, growers and wineries in the North Bay and coastal regions of California cling to hope for sustainable yields and better returns in 2012 and beyond.
This was the consensus expressed by Nick Frey, president of the Sonoma County Winegrape Commission, and one of two key presenters at the 2011/2012 Annual State of the Wine Industry Financial Roundtable held Dec. 8. The annual event, sponsored by Moss Adams LLP, attracted more than 120 attendees to the Napa Valley Marriott Hotel eager to see light at the end of the tunnel.
“The key question is will 2012 see a return to normal growing conditions, with sufficient daylight and less cloudy, cold and wet weather that severely limited bud fruitfulness and cluster count in the spring of 2011 and 2010,” Mr. Frey said. “The cold was a major contributor preventing vine flower fertilization.”
Spring conditions this year impacted grape yield potential due to the low temperatures and rain on June 4 and 28. Virtually all varieties had reduced set – the ability of grape vines to be fertilized to produce seeds and berries after blooming.
Sauvignon blanc grapes were affected the most, but cabernet, chardonnay and pinot noir varietals were also down in Sonoma County.
Yields were also lower in Napa and Mendocino Counties, but Lake County reported having a good crop and the Central Valley was minimally affected. In Lodi, crop yields were off, but prices were strong.
“Summer was as cool in Sonoma County as it was in 2010, but there were no heat spikes as we experienced in 2010. The harvest was delayed two to three weeks and October rains further reduced yields,” he said.
An aggressive program to reduce the threat of Botrytis bunch rot was initiated by many growers. Nevertheless, Alexander Valley grape growers were especially hard hit by this fungus that grows in ripening fruit.
The latest tonnage estimate of grapes harvested in Sonoma County this season is 160,000 tons, down 20 percent from the five year average and roughly comparable to results for 2003.
Grape sales are forecast at $325 million, off by $130 million from 2009. Average price per ton in Sonoma in 2010 was $2,033, second only to Napa County. Mr. Frey expects average prices to rebound from lows in 2011.
Final year-end totals will be published on Feb. 10, 2012 in the yearly Crush Report.
According to Mr. Frey, the good news is that grape buyers have returned to the market.
“Early in the season people thought they could buy grapes at the same prices as last year, but prices increased through the harvest by as much as several hundred dollars per ton.”
Mr. Frey said that buying for 2012 has already begun. “Prices had to go up, since -- until recently -- growers were selling in the spot market at a loss.”
Other positive signs include the likelihood that acreage quarantined due to European Grapevine Moth infestations may be reduced, and the fact that wine sales continue to grow.
On-premise sales over $20 per bottle have been the fastest growing segment of the market for two years.
Another factor limiting total yield is that there are few nonbearing acres available to increase grape supply. Today in Sonoma County some 59,660 acres are devoted to viticulture, down by 3,000 acres from the peak. Reduced acreage leads to a short supply indicating that grape prices should continue to strengthen.