A shock: final grape crush tops 4 million tons

The final 2009 USDA-NASS California grape crush report is a shocker — slightly more than 4 million tons crushed last season, only the second year in history crushed tonnage topped the 4 million mark.

The last time it happened was 2005, says Jeff Bitter, vice president of operations for Allied Grape Growers for California, and it took several years to work off that huge supply.

While the 2009 crush was up 11 percent from the 2008’s 3,673,858 tons, the increase is a bit misleading since a significant amount of the crop two years ago was reduced by frost.

The total wine variety crush was 3.7 million tons, 200,000 more than the highest industry estimate.

“It definitely surprised the industry,” Bitter says. “To be substantially above 3.5 million is shocking — no one expected it to be that large. It’s only about 100,000 tons shy of the record 2005 wine grape crush of 3.8 million tons.”

Total wine grape tonnage was up 23 percent over 2008. At the same time, the average price for wine grapes increased 8 percent to $605, boosting the gross value of the 2009 production by 32 percent to $2.24 billion.

Production for the San Joaquin Valley south of the Lodi District was up just 2 percent to 5 percent, depending on district. Meanwhile, tonnage increased by double digits in just about every other district.

Compared to 2008, for example, production in Sonoma District rose 26 percent, in Mendocino District it climbed 30 percent, and in Lodi District by 45 percent. Much of these large percentage increases was due to the short, frosted 2008 crop.

“Frost thinned out the crop in the Lodi and coastal areas in 2008, and it bounced back last year,” Bitter says. The lower part of the Central Valley had no ’08 frost.

“The Southern San Joaquin experienced two good-sized crops in 2007 and 2008. As a result, the 2009 crop was off. Had the 2009 crop in the area south of Lodi been very large, the total crush for the state would have blown past the 2005 level.”

What’s more, significant rains statewide last fall — which caused rot in some vineyards and softening of demand for higher-priced wines, causing some coastal growers to leave their grapes on the vines — may also have prevented the 2009 crop from setting a new production record, he notes.

The price of all wine grapes increased an average of 8 percent from 2008’s $561 per ton to $605 in 2009. At the same time, the total value of wine grapes shot up 32 percent.

The substantial increase in total revenue generated by the 2009 crop was due much more to the big jump in production and than any price increases, Bitter says.

And the 2009 crush figures don’t fully reflected the weakening in demand for California’s higher-priced wines last year. Although the average price of Sauvignon Blanc — which dropped 3 percent from 2008 to 2009 — and Cabernet Franc and Cabernet Sauvignon — each of which declined 5 percent from 2008 to 2009 — or Pinot Noir — which fell 18 percent — were reported as down, the actual value of these premium-priced grapes may have dropped even more.

“The final crush report doesn’t include the grapes that weren’t purchased at all or were custom-crushed by growers, which in a stronger market, would have been reported,” Bitter explains. “So, looking at the report you don’t see the true impact of the softening spot market for these wines.”

The total tonnage of all grapes crushed for concentrate was down significantly from 747,925 tons in 2008 to 499,323 tons in 2009.

“That difference was due almost exclusively to increased imports of cheaper Chinese apple concentrate last year and a much smaller table grape stripping crush,” Bitter says. “Also, there was a sufficient amount of grape concentrate inventory carried over from 2008, due to an extended table grape stripping crush, which put a damper on grape concentrate buying in 2009.”

Most of the 2009 raisin grape crush went for concentrate. Bitter estimates that some 240,000 tons of the total 2009 raisin grape crush of 307,360 tons was used for concentrate. The rest was made into sparkling wine, brandy or lower-priced wines.

Prices of raisins and raisin grape concentrate differ significantly. Bitter estimates at least a $100 per green ton difference between the price growers could get for drying their grapes for raisins and selling them for concentrate. In some cases, while 2009 raisins were selling for the equivalent of $265 a green ton, they were getting just $165 a ton for raisin grape concentrate, Bitter says.

“That’s a significant difference in revenue for growers and shows that, because of the imports of Chinese apple concentrate, the demand for grape concentrate dropped substantially.” For comparison, in 2008 the winery price for Thompson Seedless was $225/ton.

Although not included in the Grape Crush Report, Bitter notes that the 2009 Thompson seedless crop was much smaller than the previous year. The raisin varieties crush decreased about 38 percent from 494,124 tons in 2008 to 307,359 tons last year.

He says part of this decrease in crushed tonnage was due to a Thompson crop that was 10 percent below average in yield and about 27 percent lighter than in 2008. The industry had been expecting an average size crop but problems with rot during harvest resulted in a lighter crop than most observers expected.

The complete Grape Crush Report is available at www.nass.usda.gov/ca

TAGS: Grapes
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