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Wine grape growers in Solano's Suisun, Green valleys seek change in key California crop pricing report

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It’s been a sore point for years among certain growers.

Their west Solano County vineyards are in the prestigious North Coast appellation that also includes Napa and Sonoma counties yet are lumped together in key state and federal agricultural reports with acreage for grapes bound for more everyday wines from the Central Valley.

So a west Solano wine industry trade group is petitioning Sacramento to make a relatively small shift in the eastern boundary of the county’s grape crop statistical area.

Backers say could make a big difference for grape purchase contracts, crop insurance and valuation for vineyards in the two federally recognized winegrowing regions near the Napa County border, according to the submission by Suisun Valley Vintners and Growers Association.

“It’s been something that’s been a problem for growers in the North Coast appellations of Solano County,” said Roger King, 71, who stepped back this year after 15 as president of that trade group but is leading the effort to change the boundary of grape crush District 5.

It’s one of 17 California grape crush districts and currently follows the Solano County line, including the Suisun Valley and Solano County Green Valley American viticultural areas, or AVAs, on the western edge.

At issue is the eastern tip of Solano, which runs about 1 mile east of Highway 84 on Ryer Island, part of the Sacramento River Delta region. The petition calls for expanding neighboring District 17 south to include that area east of Highway 84.

Though it’s a relatively small land mass, that part of Ryer is estimated to account for 30%–35% of District 5 wine grape tonnage and 28% of revenue, according to the petition, which references analyses of District 5 pricing anomalies published by marketing group Allied Grape Growers in April 2017 and by Gabriel Froymovich of Healdsburg-based Vineyard Financial Associates this past July. King emphasized that actual figures are kept confidential by agriculture officials.

District 5 tonnage last year was 23,946, according to the California Grape Crush Report.

A shift of the vineyards on that portion of Ryer Island to District 17 could increase the average price for red grapes in District 5 by 29% to $1,701.01 a ton and for white grapes by 12% to $1,348.67, according to the petition’s analysis of the 2017 crush report. For District 17, which includes the Clarksburg AVA, such a shift of Ryer grapes could decrease the average for white grapes by 0.4% to $621.55 a ton but increase the average for reds by similar proportion, to $752.40.

District averages in the annual crush report, which typically first published each February then revised over the next few months, form the basis for grape purchase contracts, according to a 2006 Journal of Wine Economics study cited in the petition.

At that time 87% of California wine grape growers had at least one-year contracts with vintners, with pricing tied to a percentage premium of the district average.

“Banks pay much more attention to the contract pricing than anything else,” said agricultural property appraiser Tony Correia. Worries about oversupply are complicating contract talks, he said. “And if there’s no contracts today, that’s a very dangerous thing, because the spot market is a disaster right now.”

Correia said the west Solano effort to redraw District 5 is curious, because other North Coast districts also have wide ranges in pricing between the lowest individual sale to the highest. And that can swing vineyard valuations across a wide margin, even in Napa County.

California grape crush districts were established after the Clare Berryhill Grape Crush Report Act of 1976.

Of the original 11 districts, Mendocino and Lake counties originally were District 1 and now are districts 1 and 2, respectively. District 5 also used to include the San Francisco East Bay and South Bay, and its boundaries were last amended in the 1980s, according to the petition.

While the District 5 matter awaits a public hearing before the California Department of Food and Agriculture, potentially as soon as next month, it could be a couple of years before the change becomes effective, according to King.

That’s because if a state administrative law judge OK’s the latest change to the Berryhill Act, wineries in the state would have to be informed that grapes arriving from that Ryer Island would now be in District 17. It’s a change in processes that would have to be coordinated with the National Agricultural Statistical Service of the U.S. Food & Drug Administration, which compiles the annual crush report.

Jeff Quackenbush covers wine, construction and real estate. Contact him at jquackenbush@busjrnl.com or 707-521-4256.

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