Pinot Noir is often grown in cooler regions, and even with relatively high prices, growers may struggle to achieve economic yields. Many Pinot Noir vineyards in the coastal areas of California produce between 2.5 and 6 tons per acre. Many vineyards in Oregon produce even less. Pinot Noir can produce much higher tonnages, however, in the Central Valley of California. From calculations based on the 2012 California Department of Agriculture’s Grape Acreage Report and the state’s 2012 Crush Report, Pinot Noir vineyards in District 13 produced 12,730 tons of Pinot Noir from 24 bearing acres. That’s 530 tons per acre! At an average price of $423 per ton, that’s a gross of $224,000 per acre. This could be the 24 most profitable acres of vineyard land in the world. Or, maybe there is something wrong with some of the state’s reported numbers.
Wineries are required by law to report the tonnages they crush and these numbers are most likely accurate. The acreage numbers, however, are voluntary and many wineries and growers do not feel the need to disclose their numbers. We would not be surprised if mature Pinot Noir vineyards in District 13 averaged ten tons per acre in 2012. That would translate not into 24 acres but 1,270 acres at full production, although there are probably more acres than that but much of the acreage is not yet at full production. The problem is not limited to District 13. Statewide, the just-released acreage report claims that only 5,474 acres were planted in 2012. Surveys of nursery sales in 2012 estimate enough vines sold to plant 4 to 5 times the number of acres in the state report. The acreage report is corrected over the years; in 2005, the report stated 7,733 acres were planted that year and by 2012 the number had risen to 12,251 acres planted in 2005. These misleading numbers published within in the voluntary state report can create major misunderstandings – and lead to bad business decisions. Turrentine Brokerage uses proprietary market information from real world transactions and our research to provide district by district estimates of acres planted and forward looking projections of tons crushed for key varietals to provide information to our clients for better business decisions. District 11, 12 and 13 were the first regions to plant following many years of excess and the recession. Some of these new acres should begin bearing Cabernet Sauvignon grapes later this year, signifying the first wave of new grapes that will continue to make its way to the market over the next several years. Despite new acres coming on, inventory still remains tight and prices are still fairly strong. Many other new projections will be released in the next few weeks in the updated full issue of The Turrentine Outlook©, which will help us continue to work together for your sustained success.
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The Central Coast is off and rolling. Spring is here and with it an abundance of activity. The Central Coast was recently host to some fantastic events: Paso Wine Alliance Seminar on March 5th, Central Coast Insights on March 14th, and WiVi Central Coast on March 19th and 20th. Each event was chalked full of educational seminars, updates on the state of the industry and featured delicious regional wines during their tastings.
In addition to events, we’ve been busy watching bud break happen all around us. Santa Maria tends to be one of the first areas in the Central Coast to be out, and this year was no exception.
The weather has been mostly warm up until last week when we experienced a bit of a cooling trend. Last Tuesday, I went on a vineyard tour with a winery representative starting in Santa Maria; from there we worked our way north to Paso Robles.
9 am in Santa Maria, the majority of the bud break has already been completed.
Later that morning in Paso Robles, a few vines had bud break, but mostly bud swell.
It turned out to be a beautiful spring day.
Market activity is beginning to pick up as well. “Serious Tire Kicking”, or as we refer to it interest without deals being made, has been the main action seen in San Luis Obispo and Santa Barbara Counties. However, we are now starting to see offers being put on the table for various varieties. It looks like it will be a busy spring in 2013 and I can’t wait to see how this growing season unfolds.
Until next time—- Audra
Date: Thursday, April 11, 2013 4:00pm – 6:00pm
Save the date for Sonoma County Winegrape’s Smart Marketer Seminar to be held at the Wine Country Hilton, Santa Rosa. The topic for March is slated to be “Media and PR Training for Growers”. This includes information on Community and Neighbor Relations according to the CSWA Code of Sustainable Winegrowing.
The purpose of this seminar is to begin preparing growers to be industry spokespeople while out in the community. Liz Thach of Sonoma State University and Karissa Kruse of the Sonoma County Winegrape Commission are the topic presenters.
The meeting begins with Brian Clements of Turrentine Brokerage and an update on the bulk and grape market and prospects for 2013.
Brian Clements, Vice President
CALIFORNIA WINEGRAPE CROP TOPS 4 MILLION TONS FOR 2012
Crop Up 20% from 2011
North Coast up 47%, Central Coast up 41%, Northern Interior up 33% and Southern Interior up 4%
Statewide
“To the benefit of growers, wineries and consumers, California harvested its biggest winegrape crop to date in 2012, led by major growth in the main varietals. A long, moderate growing season in most areas of the state produced excellent quality and allowed the grapes to continue to size right up to harvest. According to the state Grape Crush Report released today, wineries crushed over four million tons of winegrapes, the equivalent of 680,000 million gallons. Growing consumer demand is expected to easily absorb the increase, especially after a light harvest in 2011. Bulk imports by California producers, who have been short of several key varieties, are likely to drop significantly.” -Steve Fredricks, President
Steve Fredricks, President / Partner
“With retail sales of Cabernet Sauvignon growing strongly, producers are delighted with an 18%, or 77,000 ton increase over the five year average. At 495,600 tons, it is the second largest crop in state history. Lodi accounted for 22,000 tons of that increase. Districts 7 (mostly Monterey County) and 8 (mostly Paso Robles), contributed 15,000 tons to the increase over the five year average.” -Brian Clements, Vice President
“Chardonnay statewide was up 13%, an increase of 87,000 tons, over its five year average. The Lodi area produced 20,000 tons of that increase with the second largest Chardonnay harvest in the history of the region. Sonoma County had its largest Chardonnay crop ever, up 16,000 tons over the five year average.” – Brian Clements, Vice President
“Merlot grew 13% over the five year 2011 average and 17% compared to the previous year.” –Steve Fredricks, President
“Zinfandel climbed 11% over the five year average and 30% compared to 2011’s light crop. The demand for “red blends,” has resulted in the reset of Lodi Zinfandel from white to red production. 2011 was the lightest year for Zinfandel in 15 years, which created a backlog of demand.” –Erica Moyer, Partner/Grape Broker
“After two light harvests, 2010 and 2011, one larger harvest has not overwhelmed demand. Supply of grapes for 2013 remains relatively tight in all regions of California, and demand is strong.” – Steve Fredricks, President
“Even when the winery tanks were full, a number of wineries did whatever they could to bring in as many of the picture-perfect clusters as possible.” –Brian Clements, Vice President
“Over the last ten years, the Pinot Noir crop has grown an impressive 356% across California – yet there continues to be high demand!” – Brian Clements, Vice President
Napa Valley
“Napa growers harvested an incredible 70,935 tons, the equivalent of 12 million gallons of Cabernet Sauvignon. Fortunately, as winemakers evaluate the new wines, the quality promises to be impressive. Even with a record harvest, demand continues to stay strong for 2013 grapes.” –Brian Clements, Vice President
Sonoma County
“In 2012, the North Coast experienced a rare “trifecta”: an impressively large crop, strong demand and perfect weather that produced fantastic quality grapes. This abundance is good for everyone, especially consumers.” –Brian Clements, Vice President
“For the first time in many years, nearly all major varieties in California are in demand.” –Brian Clements, Vice President
Brian Clements, Vice President / Partner
“The Sonoma County Chardonnay harvest yielded 80,879 tons, the largest crop ever. It is worth noting, however, that last year’s big crop has only put a smalldent in demand for 2013 Chardonnay grapes.” –Brian Clements, Vice President
“Although 2012 Sonoma County Pinot Noir tonnage jumped an amazing 95% over 2011, the demand for 2013 has not gone “Sideways.” We currently have more buyers than sellers and prices are profitable for both wineries and growers at this time.” –Brian Clements, Vice President
“The short-term benefit of a more normal crush will mean ample supplies of bulk wine actively for sale in 2013 and may soften some prices, yet un-contracted fruit for 2013 is limited and sales continue to grow. Demand seems poised to exceed supply for the near future.” –Brian Clements, Vice President
Central Coast
Audra Cooper, Partner/Broker
“Merlot continues to make a resurgence in the grape and bulk wine markets, due largely to demand as a blender for Cabernet Sauvignon and as a component in Red Blends. For the second time in nine years the weighted average price per ton exceeded $1000/ton in District 8.” –Audra Cooper, Partner/Grape Broker
“Cabernet Sauvignon in District 8 exceeded expectations at 15% above the five year average, despite two of the past five years experiencing major frost damage. Even with the increased production, demand continues to outstrip supply.” –Audra Cooper, Partner/Grape Broker
“The record 2012 Pinot Noir crop in District 8 jumped an impressive 90% from 2011 and 40% from its five year average.” –Audra Cooper, Partner/Grape Broker
“After the disastrous 2011 harvest, the Pinot Noir crop rebounded to produce a new record of 54,104 tons in District 7.” –Erica Moyer, Partner/Grape Broker
Lodi
Erica Moyer, Partner/Broker
“Lodi hit a home run with Cabernet Sauvignon, producing 26% of the state total, far more than any other region. Lodi Cabernet Sauvignon production jumped an impressive 36% over last years’ light harvest.”
– Erica Moyer, Partner/Grape Broker
“Lodi produced its third largest crop of Zinfandel, despite a continuing shift from higher yielding White Zinfandel to lower yielding Red Zinfandel. This shift is also reflected in increasing average price, from $444 per ton in 2010 to $626 in 2011 to $811 in 2012.”
–Erica Moyer, Partner/Grape Broker
About Turrentine Brokerage
Turrentine Brokerage, founded in 1973, serves as trusted and strategic advisors to growers, wineries, and financiers and specializes in the strategic sourcing of wine grapes and bulk wine from the major growing areas across the globe. Working with thousands of wineries worldwide, and with over 2,000 growers, this experienced team has negotiated transactions between buyers and sellers valued at more than $2 billion over the past decade.
CONTACT:
Brian Clements, Vice President / Partner: (707) 495-8151 – specialty – grapes from all of California, especially Napa, Sonoma, Mendocino & Lake Counties
SteveFredricks, President / Partner: (415) 847-0603 – specialty – grapes and bulk wine from all of California and around the world
Erica Moyer, Partner/Broker: (209) 988-7334 – specialty – grapes from the San Joaquin and Sacramento Valleys and the Central Coast
Audra Cooper, Partner/Broker: (805) 400-9930 – specialty – grapes from the Central Coast.
