CURRENT CROP NEWS 
                                                             December 30,2009

I want to thank everyone for another successful year. When the year started and with the economy in the tank, sales for the upcoming year looked bleak. As it turned out, we had a very good year. The wine industry proved to be very resilient with all around wine sales actually increasing. Also, with patience, our quality proved to be very good.

The biggest problem currently in the industry is the lack of available credit for smaller and medium sized wineries throughout the States. That lack of credit here in California probably affected grape pricing more than any other factor. As the year progressed, wine sales of reasonably priced wine increased while the more expensive wines saw stagnant or lower sales. This reflected in a very strong demand for the more reasonably priced grapes and an extreme drop in demand for what were the higher priced grapes. The wineries for these once higher priced grapes had full barrels and some had no credit to finish paying for the 2008 vintage, never mind make provisions for the 2009 harvest.

Contract prices did not drop for the reasonable priced grape. (The exception to that fact was the price for Chardonnay. There were several large purchases of Australian Chardonnay wine at a very cheap price earlier in the year that reduced demand.) Only some of the overproduction from contracted tonnage was priced lower. Once it was obvious that North and Central coastal grapes were not going to be bought at "fancy" prices, the spot price dropped to the range of the reasonably priced grapes with mixed results. Everybody is waiting to see what the crush was from the different areas to fully access the 2009 production. Totally, there was probably a 400,000 to 500,000 ton increase from the 2008 crush.

There are currently different trends occurring. I hear there is some activity for contracts for the 2010 season and yet I hear that a lot of long term contracts were completed in 2009.

Our lending institutions will eventually realize our Wine Industry is a solid business with a great future. I hope everyone had a successful marketing Holiday Season and A New Year that exceeds everyone's expectations. Thanks Mike