DROUGHT, DROUGHT, DROUGHT…
It seems like all anyone talked about in 2021 was drought, and for good reason. The 2020-21 rainfall season was the driest ever recorded since 1895. Then in early November of 2021, we experienced one of the largest and intense rainfalls ever for a couple of days. A lot of areas received over 5 inches of rainfall. A holiday gift was then given to California with continuous rains between Christmas and New Years. What a great start to the rainy season. The only problem is that there has not been any precipitation since then. It has been over a month and the forecast for the next couple of weeks is for dry weather. Someone forgot to tell Mother Nature that this is our rainy season! We experienced the driest January ever. If this dryness persists, wells will be the only source a grower will have to irrigate. There will be no water available for California Agriculture from any Federal or State water districts.
AN AMADOR SOURCE
One of our growers (Sangiovese and Zinfandel) was recently mentioned in a recent BARRON’s article by Hudson Lindenberger. We have been selling some of his Sangiovese and Zinfandel for years from Amador County (Foothills). We quote:
“Winery: Avio Vineyard Specializing in the Italian-style varietals that Amador County is known for, Avio Vineyards feels like one has been transported from the Tuscan countryside. Founded by a family with winemaking roots that stretch back to Italy, they are a boutique vineyard that produces small batches of award-winning wines. Their Barbera is chock full of black cherry and plum flavors that intermingle with hints of vanilla and smoke. They also make a smooth Sangiovese that's a pleasure to sip.”
PRICING???
We are attempting to sign up some of our regular long term growers to new contracts for the upcoming season. Even though our growers have pledged to sell the grapes to us this year, there is no consensus of what prices should be for the next couple of years. Last year everyone came out about this time and bought as many grapes as they could. As the 2021 season progressed, spot and minimum prices rose as the lightness of the crop became apparent. Now there is a very natural hesitancy to wait and make a more timely decision.
Some facts are obvious:
There are currently not that many grapes that aren’t under contract. Wineries are trying to extend the three year contracts signed the last couple of years at higher prices. Again no consensus of what that price should be.
Cost of farming of almost anything is increasing dramatically and we are still seeing marginal grape acreage being pulled out.
We have had two light crops in a row. This is what is causing the unprecedented demand for grapes and wine. The projected Annual California Grape Crush Report is estimated for 2021 at 3.6 million tons. The official Report is due out shortly. If it proves less than the 3.6 million tons, prices will rise even more so, if it proves higher there may be some easing. Regardless, prices will rise.
SEE YOU IN TEXAS
We will be exhibiting at the Texas Wine & Grape Growers Association on February 17th through the 19th. We will be in Booth 515. We hope to see a lot of our Southeast and Texas customers.
We also hope to visit a couple of our customers at their wineries.
