Less Grapes, More Money

According to a report released Tuesday by the California Department of Food and Agriculture the smaller crops of grapes, the more financially secure wineries will be.
During the last harvest California wineries produced 3 million tons of wine grapes, down 6 percent from the previous year.  The smaller crop will help wineries from devloping a large backlog of wine inventories and reduce the pressure to cut prices to move current vintage, said Steve Fredricks, managing partner of Turrentine Brokerage, a large wine-grape broker.
“The last few times we had a recession we also had huge inventories because of vineyard plantings and large crops, and that hurt prices,” Fredricks said.
Economists believe that California’s wine industry will have a modest growth this year. Although restaurant wine sales have dropped 10 to 12 percent, people are still buying a massive amount of wine for home use.
The only problem with people buying wine for their homes is they tend to purchase the lower to moderately priced wines instead of high quality and priced wine, it is their way of “cutting back.”
Fredricks said even Pinot Noir, made popular by the film ‘Sideways’ will see prices fall. Despite the fact the red-wine harvest dipped 9 percent to 1.7 million, the varietal of pinot noir grew by 17 percent.  This wine is highly demanded by restaurants, even if sales are slipping.
The craft is to watch the market and keep an eye on the changing trends.  If you are interested in joining the trend to become a vintner, please contact a Farm Plus consultant. Call 866-929-5585 or visit their Web site for more information on vineyard loans.