Grapes: Who's Planting What?

Even with a larger-than-average crush expected this year, some grapegrowers are replacing or increasing acreage

by Paul Franson
The graph charts recent plantings by variety and general price-point for wines sourced from grapes throughout California. Data collected by Allied Grape Growers.

Lodi, Calif.--After three light harvests in a row, the California wine business has finally overcome the effects of the huge crop of 2005. That's been a welcome relief in the current economy, for often in the past, growers have had to deal with simultaneous economic slumps and grape surpluses.

A big question for most growers--and wineries--has been: How big will this year be? It's too early for definitive answers, but at the 2009 Vineyard Valuation and Ag Symposium in Lodi yesterday, Nat Di Buduo of Allied Grape Growers went out on a limb for the first time with his projection of the harvest size: a generous 3.45 million tons of winegrapes crushed compared to 3.05 million last year. In 2005, the total was 3.76 million tons.
In addition, he expects 0.45 million tons of other grapes will be crushed for wine.

At the meeting sponsored by the California chapter of the American Society of Farm Managers and Rural Appraisers, Di Buduo couldn't speculate how much of the crop might not be crushed or turned into bulk wine by growers who can't sell their crop.

This expected big crop is happening at a time when consolidation among grape buyers has created soft prices for many grapes, especially outside top coastal regions. This soft market has discouraged most growers and wineries from planting new vineyards, but many are being forced into replanting as vineyards age and tastes change.

In general, most vines planted on rootstock tend to start becoming less productive after about 15 years, and 20 years is considered a typical productive life. Another speaker at the symposium, Chuck Hammond, noted that almost 80% of California's vineyards are more than 9 years old; 37% are 17 or older.

On the current sales trajectory, in fact, demand will exceed production of California grapes in a few years--unless growers expand planting. That shortfall will likely be met by cheaper imported grapes unless American growers plant.

In addition, changing fashions have meant many growers have replanted or grafted to other varieties over the last few years, notably to fast-growing Pinot Gris/Grigio and Pinot Noir.

Di Buduo's mantra is "Don't plant without contracts," but he recognizes that some growers do have the nerve to plant on speculation. He also believes it's time for planting in moderation.

To find out what's happening in new plantings, he conducted a confidential voluntary survey of California nurseries to determine what and how much growers are planting.

He said he believes he captured data representing up to three-fourths of the major varietal vine sales in the state by variety and region. "Depending on vine spacing, the total planted area is between 14,000 and 18,000 acres," he said.

Interestingly, the voluntary reported Grape Acreage Report numbers provided to the state are far lower, only 6,400 acres in 2008. "A lot of people don't report, including one of the state's biggest growers."

Di Buduo's numbers don't include grafting, which can use clippings from existing vineyards. He found 59% of the new vines sold are red, 41% white. For the eight major varieties, the shares are:

Pinot Noir: 36%
Chardonnay: 22%
Pinot Grigio: 16%
Cabernet Sauvignon: 13%
Zinfandel/Primitivo: 5%
Syrah: 4%
Sauvignon Blanc: 2%
Merlot: 2%

Di Buduo also broke out the varieties by market segment, which also naturally related to where the vines are planted. Not surprisingly, Pinot Grigio is overwhelmingly being planted in value regions, notably the Central Valley. The highest percentage (on a small base) going into the high-end regions were Sauvignon Blanc and Merlot. Chardonnay and Syrah were primarily being planted in mid-range areas (Central Coast).

He also discussed prospects for each major variety, noting that contracts are being offered for planting Chardonnay; the market is likely to be short or balanced in the future depending on crop size.

He suspects Pinot Grigio and Pinot Noir are being overplanted. "There's a lot of grafting of Pinot Grigio, too. We need to get what's already there into production and see the demand before we plant more," he warned. He also thinks the market is moving toward an excess in Pinot Noir.

Interestingly, the market for Zinfandel in Lodi, its top region, is shifting from demand for use in white Zin to red, though Di Buduo joked, "The real key in this market is to plant Old Zin." Primitivo, a variation of the same grape variety, is being favored in many new plantings because of better growing characteristics.

In sum, for the first time in years, Di Buduo advised that opportunities exist for planting--but only considering the opportunities for fair return--and in moderation with a signed contract in hand.

Currently no comments posted for this article.