North Coast wine grape crop shrinks in value by 15% in 2019 as a result of a lower yield
The value of the North Coast grape crop slid to $1.7 billion last year, down 15% from 2018 as wine sales leveled off across the United States and wineries reacted by crushing less fruit, according to the annual California grape harvest report released Monday.
Farmworkers picked 490,922 tons of grapes — a 17% decrease from 2018 — from vineyards in Sonoma, Napa, Mendocino and Lake counties during the 2019 harvest, which kicked off in mid-August and lasted until the end of October.
Grape prices, however, ticked up slightly last year. The average price of grapes harvested in the four-county region increased 2% from the previous year to a record $3,499 per ton in 2019, according to the preliminary state harvest report compiled by the U.S. Department of Agriculture. Final figures will come out next month.
The decline in the size and value of last year’s regional grape crop had been expected, since growers were forced to leave tons of grapes on the vines without wineries to buy the fruit and retail wine sales flattened. Grapes to make Sonoma County chardonnay were among those left in the vineyards, as the statewide total of 3.89 million tons crushed was smaller than expected. The report does not track the number of tons of grapes left on vines.
Yet even with the smaller 2019 crop, the regional crop yield was near the 10-year historical average of 491,662 tons.
Last year, wineries were reluctant to buy excess fruit, after 2018’s record crop of 588,864 tons left them with an abundance of grapes for near future years given reduced sales projections.
“The 2018 crop was the two-by-four that broke the camel’s back,” said Brian Clements, vice president of Turrentine Brokerage, a Novato-based wine and grape broker.
Industry analysts contend the oversupply of wine in the marketplace will result in a continuing adjustment this year, even in the North Coast, which grows the most expensive fruit. Some growers may take vines out to replant or let their vineyards go fallow. Others likely will have to accept less money when they sign or renew contracts with wineries.
“We did not have a lot buyers at the end of 2019,” said Glenn Proctor, a partner at Ciatti Co., a Novato grape and wine brokerage.
In fact, some large wineries such as Jackson Family Wines of Santa Rosa that are typically the biggest grape buyers also sold their excess grapes from their own estate vineyards.
“Some of the normal buyers aren’t just buying, but some of the normal buyers are actually selling,” Proctor said.
The big debate in the wine industry is how long will it take to get the market rebalanced?
Clements said it could take up to another two years, depending on how big the yield will be from the 2020 grape crop.
Some local growers said last year was challenging and they are likely to accept that prices may be flat or decrease when negotiating with wineries on new contracts.
“Buyers aren’t really active right now, ... but I’m a grower, so I’m entirely optimistic,” said Bret Munselle, a fifth-generation farmer with Munselle Vineyards who works about 700 acres around the Alexander Valley for up to 20 winery clients.