Current Crimp in Wine Grape Demand
By Patrick Cavanaugh, Editor
While wine grape harvest in
the Central San Joaquin Valley is proceeding for another two weeks, local
winery giants such as Constellation and The Wine Group are not buying any more grapes that are not contracted throughout California, noted Nat DiBuduo, President of the Fresno-based
Allied Grape Growers.
“While the vast majority of
wine grapes have been purchased at a good price, there have been a lot of bulk wine imports which are tying up tank space, so demand is losing
strength,” DiBuduo said.
“The competition is not only
your neighbors' fruit, but also the global market,” noted DiBuduo.
Even in the north coast,
demand is weak because there is still wine in the tanks from last year’s big
crop. Wineries there are fulfilling contracts, but it has been tough for some
varieties such as Red Zinfandel and Merlot.
Furthermore, north coast
wineries have not expanded their capacity to meet the growing wine demand.
“Because of these capacity
issues, many wineries are turning away any grapes from vineyards with any virus
issues,” noted DiBuduo. “Many old grape vines have plant viruses which may hurt
production. Many old Zinfandels have had viruses for years and have always
been purchased by wineries, but for some reason, several operations are turning
away the grapes this year.”
Some grape varieties are not even
being harvested because there is no demand.
Demand is still good for varieties such as Cabernet, White Zinfandel and Chardonnay, even though
Chardonnay is still in excess for some wineries.
“Prices for many varietals
are significant for tonnage that is in excess of the contract,” noted DiBuduo. “It’s very significant for
some growers who are leaving grapes on the vine, hoping to get a buyer,” he
added. “It’s all relative to what part of the state the grower is in and the
varieties he is farming. There could be a winery that will buy the grapes at
the right price for them.”
This volatile season is in
part due to a low Thompson Seedless price from $225 to $300 per
ton, with the average under $250. “Many growers decided not to go green this
year and are holding out for a raisin price,” said DiBuduo. “Because of the
unstableness of the season, I predict that there could be as much as 15,000
acres of Thompson pulled after this season. I know that the bulldozers are
Labels: 2013 wine grapes, Current Crimp in Wine Grape Demand, Demand is down., Nat DiBuduo