The Crush - July 2020 - 7

[ INDUSTRY NEWS ]

CA Lawmakers to USDA: Add Winegrapes to CFAP
CONGRESSIONAL DELEGATION WANTS WINEGRAPE GROWERS TO GET DIRECT AID
More than 25 members of Congress on July 6 sent a letter (below)
to U.S. Department of Agriculture (USDA) Secretary Sonny Perdue
requesting that winegrape growers receive financial aid through its
Coronavirus Food Assistance Program (CFAP).
Beginning May 26, CFAP intended to provide up to $16 billion in
direct payments to agricultural producers who suffered losses due
to COVID-19 related market and supply chain disruptions. As of
July 14, winegrapes were not among the nearly 90 commodities
listed under CFAP specialty crops. INFO: farmers.gov/cfap/data
Dear Secretary Perdue,
We the undersigned want to bring to your
attention the serious economic challenges
confronting California's 5,900 California
growers of winegrapes. The COVID-19
pandemic has broadly undermined market
prices for California winegrapes and we
believe the U.S. Department of Agriculture
should include wine grapes on the list of
specialty crops eligible for direct payments
in the Coronavirus Food Assistance
Program.
For 2018, the California Department of
Agriculture reported all forms of grapes
(wine, table and raisin) were the state's
most valuable crop, with a total farmgate
value of $6.25 billion. Grapes destined
for wine, worth approximately $4 billion,
contributed the single largest share of
total farmgate value for grapes.
The shutdown of key market channels,
both domestic and international, for wine
sales, due to COVID-19, has resulted in an
overall decline in retail sales to consumers,
reduced volumes of wine shipped to
market and lower prices for bulk wine in
inventories. These factors mean increased
inventories of finished wine in 2020 and
wineries are offering growers fewer
contracts for the purchase of grapes and
at lower prices for the upcoming crop
harvest.

The delegation's letter follows a May 19 letter from CAWG and the
California Farm Bureau Federation to Perdue, which also urged
USDA to allow winegrape growers access to COVID-19 assistance.
"The letter from the California congressional delegation is a
tremendous boost to our efforts to seek vital financial assistance
for winegrape growers," CAWG President John Aguirre said. "We
applaud and appreciate the leadership of Rep. Mike Thompson
(D-Napa) in crafting the letter and garnering support from his
colleagues."

An analysis by noted wine industry analyst
Jon Moramarco of bw166 concludes that
California's winegrape growers will feel
the full economic impact of COVID-19
when harvest begins in late-July of this
year. According to Moramarco, COVID-19
related shelter-in-place mandates and
economic closures will mean $437 million
less revenue for California's winegrape
growers for the 2020 crop.
Growers' losses are driven by a decline in
California wine sales. In total, Moramarco
expects retail sales of California wine for
the 12-month period from March 2020
to February 2021 to decline by $3.58
billion. The decline in sales volume is due
primarily to COVID-19 related closures and
restrictions for such venues as restaurants,
bars, hotels, stadiums and winery tasting
rooms. Consequently, COVID-19 related
impacts on the marketplace will reduce
the total value of grapes purchased and
utilized by wineries in 2020 by $437
million, resulting in a nearly 11% decline in
the total value of grapes sold this year.
Even as the nation's economy reopens, key
market channels for California wine will
continue to be affected by public health
restrictions that prohibit large gatherings
and events, dictate physical distancing
requirements in public settings or impose
capacity constraints for certain types of
premises where wine is sold.

California's winegrape vineyards are the
foundational element of a very robust
and substantial portion of the state's
economic landscape. Grower's losses,
driven by COVID-19, will have significant
consequences for our state. Sonoma State
University recently concluded a report that
indicates the combined effect of growers'
losses and reduced sales of California wine
will result in a contraction of $9.6 billion for
California's economy, and a potential loss
of 42,376 jobs and $586 million in state
and local taxes stemming from COVID-19
related losses to wineries and growers.
We urge the inclusion of winegrape growers
in the direct payments Coronavirus Food
Assistance Program and other programs
of assistance intended to aid growers
affected by the COVID-19 pandemic.
Sincerely,
Mike Thompson, Dianne Feinstein, Kamala
D. Harris, Julia Brownley, Jimmy Panetta,
Jim Costa, Barbara Lee, TJ Cox, Ami
Bera, Salud Carbajal, Doug LaMalfa, John
Garamendi, Juan Vargas, Doris Matsui, Eric
Salwell, Jared Huffman, Alan Lowenthal,
Gilbert R. Cisneros, Jr., Jerry McNerney,
Lucille Roybal-Allard, Anna G. Eshoo, Tony
Cardenas, Josh Harder, Pete Aguilar, Mark
Desaulnier, Devin Nunes, Harley Rouda

JULY 2020 / 7
https://files.constantcontact.com/cd6628ed001/ff9eb166-8495-4d1b-b2c4-ce7c412bf6df.pdf http://www.farmers.gov/cfap/data
The Crush - July 2020

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