By Elizabeth Hans McCrone
A recently completed benchmarking survey indicates that replanting and new vineyard plantings are slightly down for California in 2014 and up by five percent or more for Washington State, with those trends expected to prevail for both wine regions well into the 2015 planting season and beyond.
The 2015 Winery and Grower Benchmarking Survey, conducted by Moss Adams, LLP, Farm Credit and Turrentine Brokerage, looked at yields per acre, spot market grape prices, planting trends and participant observed future trends throughout California and the Pacific Northwest for both 2014 and 2015. It also examined a number of significant winery issues related to pricing, production and overall industry operations.
According to its authors, the study was done at the end of last season to assess the “post-harvest mindset” going into the New Year from both grower and winery perspectives.
“We started with a series of filter questions and got into … the ins and outs of what happened in 2014, comparing that with long term trends and where everybody thinks it’s going in 2015,” explains Daniel Tugaw, Market Researcher and Analyst with Turrentine.
The idea, according to William Vyenielo from Moss Adams, was to get key information out to the industry “compatriots” at a time of year when it will be most valuable. “We wanted to know what types of decisions vineyard and winery managers are making … and where they’re going to be investing their resources (going forward),” Vyenielo affirms.
Approximately 400 respondents participated in the industry questionnaire. For the grower portion of the survey, 28% of the replies came from Sonoma County. Napa Valley made up another 17%, Washington State 11%, Lodi/Delta 10%, Mendocino, Lake and Suisin counties 8%, Paso Robles 7%, Oregon 6%, Monterey County 5%, Santa Barbara 4% and 2% each for Southern San Joaquin Valley and the California Foothills.
Some of the primary survey results show that planting and yields per acre for both Napa and Sonoma counties were at or below 2013 levels. Despite the decrease, participants from both regions still reported sizable crops and a general sense of industry optimism related to strong sales growth going into 2015.
However, Mike Needham, Turrentine’s North Coast Grape Broker, notes that grape prices are continuing to rise, which is a cost that’s difficult to pass onto wine consumers and may serve to squeeze winery profits. He also says that in Sonoma and Napa it’s becoming “increasingly difficult” to find new land for viticulture due to the costs of agricultural production and restrictive land-use permits.
“Along the North Coast there’s more replanting than new plantings.” Needham attests. “And the replanting rate is not at the level it needs to be for sustaining acreage.”
John Duarte, owner of the Modesto-based Duarte Nursery, one of the largest permanent crops nurseries in the United States, confirms that purchasing of new wine grape vines is down in California this year.
“New plantings are verging on non-existent,” Duarte states.
Duarte points out there are still a lot of vines in the ground throughout California and that his company has seen an increase in the purchase of Uber and Magnum vines, larger format plants that require less field labor costs to become established.
Referring to the Central Valley that has been hardest hit by California’s continuing drought cycle, Duarte observes, “The growers that have a water plan are still planting.” He points out that “droughts don’t last forever and a newly planted vineyard takes less water. It’s kind of a good time to be replanting.”
The benchmarking survey results paint a much different picture moving up the coast of California and into Washington. According to the study, respondents there report that new plantings in the state were up close to eight percent for 2014 and climbing to nearly nine percent for 2015.
Vicky Scharlau, the Executive Director of the Washington Wine Grape Growers Association, is cautious about “assuming those numbers represent the totality of the state,” particularly since just 40 of the respondents came from Washington.
“We have a size magnitude here, to put it in perspective,” Scharlau notes. “It’s dicey to compare areas. We don’t have the length and breadth of California … you could put all of Washington’s (wine production) into the Napa Valley.”
Still, Scharlau did confirm that between five to six percent of Washington growers are “changing out new vineyards,” and that land for further agricultural development is available there.
For example, Scharlau references the sweeping, Columbia Basin Project, which was established in 1942 to provide irrigation and infrastructure to more than a million acres of land in Central Washington for agricultural development. Scharlau says the project, now 75% complete, still leaves up to 250,000 acres for future expansion.
“There is an agricultural future here, especially for wine grapes,” Scharlau attests. “We’re not exactly the Wild West; it’s more like the progressive west with potential for growth.”
