(February 10, 2021, Novato, CA) – The California Department of Food and Agriculture’s preliminary grape harvest report for 2020 was released today. The harvest was significantly below average, but in volume terms it was in line with Ciatti’s preliminary estimate. Still, it is perhaps the most difficult report to analyze. The total tonnage is down, but this is due both to Mother Nature’s reduced harvest and the smog problem that has affected most coastal areas, where an unknown amount has not been harvested. Understanding how each of these issues affects the final overlapping tons in terms of scale is an issue that will determine future discussions in this market. The same issues can be raised in the price analysis in this report. Pricing is pervasive. We believe this is primarily due to the inertia of the non-existent spot market for coastal grapes in the early 2020s. But it is also due, to a lesser extent, to the lower prices we have seen in the secondary market for coastal grapes, which has emerged where grape prices have fallen after the fires. This has led to early buying activity in the central valley for all major grape varieties
and preliminary discussions about buying grapes in the coastal areas.
The extent of the Cabernet Sauvignon price decline in the state was somewhat surprising. Since the effect on prices was more pronounced on the coast than in the San Joaquin Valley, we believe that the effect of the summer wildfires contributed significantly to the weaker than expected results. Although yields appear to have declined in all
the figures seem to indicate that a higher percentage of Cabernet Sauvignon grapes were not
harvested or sold at a discount in areas that would have been most affected by the smoke from the fires. Apart from the smoke problems, the grape market was already depressed because Cabernet had not done well in the previous 18 months. There was some overproduction in the wholesale cabernet market and some cabernet grapes remained out of demand in 2019
. The combination of heavy smoke and negative market conditions seems to have driven Cabernet grape prices down even further than expected.
When it became clear that smoke from the summer’s wildfires would negatively impact the upcoming harvest, the wholesale market for Cabernet wines immediately sprang into action, driving up prices. (National) At a time when market prices for Cabernet grapes were falling in most areas of the North Coast, wholesale prices for Cabernet wines of the 2018 and 2019 vintages were rising in the same region. As for Cabernet Sauvignon, it is clear that the perception and reality of smoke damage played a major role in the decline in grape prices and the significant increase in wholesale wine prices. – Greg Livengood
Chardonnay, the state’s top grape variety, has been released for the 2020 harvest. A total of 538,500 tons were produced in the state, representing a significant decrease (-16%) and, for the second consecutive year, a significant decrease in volume and a 12% decrease in price per ton compared to the previous year.
Regional differences showed significant declines in yields in the coastal areas of Sonoma (-34%), Napa (-35%) and Monterey (-9%), and further declines in Lodi (-23%) and Clarksburg (-16%) in the Central Valley, while tonnage in the Southern Interior Valley was mixed with increases in Modesto (+10%) and Fresno (-9%) and declines in Bakersfield (-23%).
Chardonnay prices fell slightly overall. Prices for coastal produce from Mendocino (-15%), Lake (-16%) and Monterey (-19%) have fallen sharply, as have relatively stable prices in the Inner Valley and the upscale areas of Napa and Sonoma. – John White
The market for pinot noir has returned to balance. The surplus created by the great harvests of 2018 and 2019 offers buyers abundant supply at reasonable prices. The 2020 harvest will bring this dynamic back into play.
The 2020 statewide yield is about 20% lower than the 2019 crop.
The consensus seems to be that Pinot Noir could be the variety most affected by smoke in coastal areas during the 2020 harvest fires. It has a thinner skin and by nature this variety is more easily affected by external aromatics, which is justified.
This slight harvest in 2020 bodes well for the future, as it will at least stimulate earlier conversations about future delivery strategies for pinot noir. It is harder than ever to know if this will lead to real transactions, and any significant increase in real and long-term prices after this unique market shock could be short-lived. ”
North Coast: After last year’s small harvest on the North Coast, most were surprised by another small harvest in 2020. The overall harvest on the north coast was down about 30% and grape prices remained low as growers experienced harvest difficulties during the pandemic and fires. The season started off smoothly, with very favorable growing conditions, but there was a bumpy period at the end of the harvest with late season fires resulting in some grapes not being harvested, resulting in a decrease in the number of tons of grapes pressed.
In Districts 1 through 5, better known as North Shore, the tonnage for the major grape varieties has completely declined, as evidenced by the following highlights :
The 2020 harvest on the Central Coast will be a year that neither farmers nor winemakers will ever forget. Mother Nature and smoke damage are the perfect storm of problems. In August 2020, the wholesale market for wine and grapes experienced a drop in prices due to the pandemic and continued oversupply. August marked the history of the wine industry with early fires that caused smoke problems that most producers on the Central Coast have never experienced. Late season activity in the Central Coast wine wholesale market helped balance supply, resulting in higher wholesale prices for 2019.
With the release of the preliminary disaster report for 2020, we are seeing a decrease in tonnage on the Central Coast: Cab Sauv (-11%), Pinot Noir (-38%), Chardonnay (-11%) and Merlot (-33%). Wholesale purchases of grapes and wine grapes were up sharply across the central coast. – Todd Azevedo
International 2020 Crush: The total yield of the International 2020 Crush region is down (-15%) from 2019 at 2,466,375 tons. A shortfall of over 430,000 tons from 2019 could result in a reduction of approximately 70,000,000 gallons of wine. Early in the season, grape demand was generally active as buyers began to sign contracts for late delivery of grapes. Activity increased as the season progressed, with evidence of a shift to lighter crop and vineyard sales during the pandemic. Although smoke-related fires were initially a concern in the coastal area, their impact was not as severe as on the coast.
Southern Interior (Districts 12, 13, 14): District 13 (Madeira/Fresno) pressed 1 197 634 tons of grapes less (-5.7%). Despite the overall decline, Cabernet Sauvignon from district 13 is the only one to increase relative to the national total (+9.7%). Grape production in District 12 (Modesto District) is down (-4.8%) to 296,218 tons, with lower production from Cabernet (-16.4%) and Merlot (-14%). District 14 (Bakersfield District) experienced the largest decline in domestic acreage at 218,993 tons (-20%). The sharp decline continues for Pinot Grigio, which is now 9,700 tons, down from 30,000 tons two years ago.
Northern inland districts (districts 9, 10, 11, 17): In 2020, District 11 (Lodi) experienced an overall decrease (-12.3%) to 679,123 tons, the lowest since 2015 and almost 100,000 tons less than in 2019. Chardonnay experienced the largest decline at 98,184 tons, 30,000 tons less than in 2019. Merlot also experienced a significant decrease (-19%). Sauvignon Blanc, on the other hand, increased (-23%) and remained in high demand. Clarksburg (District 17) is down slightly (-5.2%). The region’s largest variety, Chardonnay, fell to 51,069 tons of pressed grapes. District 9 (Northern California) and District 10 (Sierra Foothills) also declined compared to 2019. – Johnny Leonardo
About CIATTI GLOBAL WINE & GRAPE BROKERS
Ciatti is the largest and most complete wine and grape wholesaler in the world. In addition to its headquarters in Novato, California, seven other offices around the world provide customers with the kind of information and insights today’s competitive global wine industry needs.
Founded in 1971, the company is deeply rooted in the wine industry, both in California and in the states where it operates. The partnership now includes industry experts with more than 135 years of combined experience, including Greg Livengood, Glen Proctor, John White, Chris Welch, Steve Dorfman, Todd Azevedo and brokers Johnny Leonardo, Jed Lucy and Dennis Schrapp.
Contact: Ciatti Company, Molly Richardson, 201 Alameda Del Prado # 101, Novato, CA 94949 [email protected] Phone (415) 458 – 5150 Fax (415) 458-5160http://www.ciatti.com
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