The Crush - November 2021 - 2

FEATURE STORY
are in balance now. " He said Central Valley grape prices are the
strongest they've been in over five years. There was virtually no
spot market activity this year in the San Joaquin Valley and Lodi,
but some activity in the Central Coast. " Fruit did not hang on
the vine this year, there was a market for everything, it was just a
matter of price, " Bitter said. " Unfortunately, the improved market
is based on short crops, not on increased wine sales, " he added.
Improved demand and higher prices come with good news and
bad news. Bitter said, " The good news is that grape buyers are
already talking with growers about renewing and extending
contracts, not only for grapes coming off contract in 2021, but
also for those contacts expiring after the 2022 harvest, to ensure
longer term supply. That's an indication of supply getting into
balance with demand. "
But he also noted, " Grape prices are moving up with a stronger
market, but the costs of production have increased as well, so
I'm not sure we've gained ground from a profit standpoint. "
He cited increased labor costs, a higher minimum wage, higher
water costs, trucking costs (almost 10% percent higher this year
associated with fuel costs), and supply chain issues that trickle
down to raise prices at each level. Bitter summarized, " It feels
good to have a strong market and contract offers with higher
prices, but no one is running to the bank with more money, due
to higher costs for inputs and production. "
Glenn Proctor, partner at bulk wine and grape broker The Ciatti
Company, said bulk wine inventory is down overall, more
so from the Central Valley as off-premise sales remain good.
More coastal inventory is available. Although the market looks
balanced for the near future, uncertainties lie ahead. " I think we
will see stable prices for grapes and bulk wine, but not runaway
growth, as some market adjustments are being made, " Proctor
said. " Wineries are having a tough time going forward and
anticipating needs. " This is due to overall flat wine sales growth
and supply chain issues.
He said the bulk wine market is quiet right now, as wineries try
to figure out what they have with this year's crop and see where
the market is going. Regarding shipping industry delays, rising
costs and the supply chain, Proctor said, " It's affecting bulk wine
movement and transactions. Wine is being stored longer because
people can't get glass and bottling supplies. But it's also affecting
everything else. Some are delaying vineyard planting because of
the availability and price of steel that goes into trellis supplies. "
Export and import shipping delays, and trucking/delivery
challenges due to a driver shortage, present logistics issues that
may not improve until 2023. " All you can do is be patient and
try to work through it, " Proctor said. He also pointed out that
although growers may get contracts with higher prices, lighter
crops/less tonnage sold two years in a row likely still reduced
overall income for some, and unless dry conditions and water
supplies improve, 2022 could be another light crop.
2 NOVEMBER 2021
REGION AND VARIETY HIGHLIGHTS
According to Bitter, the North Coast crop was light across the
board for all varieties. " Sauvignon blanc was extremely light,
lighter than we've seen before, and Lake County was affected
by the November 2020 freeze, with some vineyards down to
half of normal yields, " he said. Proctor said Mendocino and
Lake counties saw yields down 30%-40% from normal with light
crops for cabernet sauvignon, chardonnay and sauvignon blanc.
" Napa's crop was 15%-20% off from normal, but was much better
than last year, " he said.
Sonoma County Winegrowers President Karissa Kruse in a press
release said, " It has been near perfect for growing grapes this
year and a second year of a lighter crop is bringing more balance
to the market, which is encouraging. " Yields were slightly lighter
to average, and grape quality is viewed as excellent with intense
flavor profiles. Challenges were that many varieties ripened
around the same time, and labor was a challenge for both
vineyards and wineries, a problem across all industries with the
national worker shortage.
Lodi Winegrape Commission Executive Director Stuart Spencer
said yields across the Lodi region were average to a bit lighter
than average. " We saw strong demand across the board for all
varieties. The grape market has definitely shifted and everything
was picked this year. " Demand for zinfandel had been weak in
recent years, but that changed in part as older zin vineyards were
removed. Harvest started and finished a bit earlier than normal.
" A heat spike in late August/early September accelerated
ripening, presenting a logistical challenge for everyone the first
three weeks of September with many varieties ready at the same
time, " Spencer said. Labor was a challenge in several areas: hand
picking of old vine vineyards, finding skilled machine operators
for mechanical harvest, truck drivers to haul grapes and cellar
crews at wineries for crush operations. " Overall, quality looks
exceptional and vintners are happy with the wines now in tank
and barrel, " Spencer said.
With the San Joaquin Valley crop coming in lighter, demand for
grapes, wine and grape juice concentrate went up and prices have
started to follow. Bitter said demand is high for French colombard,
and with a short 2021 crop, buyers went looking for Thompson
Seedless to fill in the gap, even buying some for sparkling wine.

The Crush - November 2021

Table of Contents for the Digital Edition of The Crush - November 2021

The Crush - November 2021 - 1
The Crush - November 2021 - 2
The Crush - November 2021 - 3
The Crush - November 2021 - 4
The Crush - November 2021 - 5
The Crush - November 2021 - 6
The Crush - November 2021 - 7
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