August 15, 2002
Cryin' The BluesSeveral weeks ago, I found myself being telemarketed by grape growers. Odd, I thought! Just like getting those intrusive calls from long distance providers interfering with the cocktail hour. You know it's a sign of desperation when vineyard owners are telemarketing people like me, a retailer. (Retailers, of course, are the "bottom feeders" in the wine marketing chain. We don't have the large profit margins that winery owners and vineyard owners have.) However, many grape growers are not doing well. The profit pendulum is on the downswing.
Since the mid-'80s, as I have written in this column, Santa Barbara grape growers have been commanding top dollar for their fruit. Our wine grapes, particularly chardonnay and pinot noir, are some of the finest in the New World.
Santa Barbara County and Santa Maria Valley chardonnay could command $2500 a ton, sometimes more, depending on the vineyard.
Monkey See, Monkey Do!
Seeing these tonnage prices, wine wannabes itched to get in on the action. As a consequence, vineyard acreage has doubled here in Santa Barbara County and throughout the state. As the law of supply and demand insists, the more a produce is available, the less a buyer needs to pay for it. Since grape output has gone up, the prices have gone down-fast!
A prominent local producer whose wines I sell told me he gets calls from growers all the time now just asking him to make an offer. And a local vineyard manager told me just last week that we will be seeing a lot of vineyard bankruptcies, that "the glut we are seeing right now is worse than the glut in the '80s."
I've been hearing there's a lot of exceptional fruit for sale for $300 a ton-or less. That's good for us, the consumers, but as this vineyard manager friend of mine pointed out, vineyard costs remain the same.
Demand simply couldn't keep up with growth. If growers borrowed money on the presumption that chardonnay would sell for $2,500 a ton forever, what are they telling their bankers now? Doubling vineyard planting, as we have seen here in Santa Barbara County in the 90s, presupposes something that strikes me as wrong; that wine consumption will increase on a more-or-less equal growth rate too. At best, that kind of consumption growth rate is pure fantasy-just plain and simple wishful thinking.
This is certainly not the case, as we are witnessing now.
Even last harvest, about one-third of the chardonnay in Monterey County was left on the vine to rot, I am told. It would have cost the growers more to pick than the fruit was worth.
For now, the days of $2500 a ton chardonnay are over
I ponder the possible parallel of plummeting grape prices and the recent dive in the stock market. Maybe I'm being cynical, but quite possibly there were two many investors who shouldn't have been buying, and two many land owners planting grapes who should have considered some other crop. Stocks on the Dow Jones Industrial Average were over inflated; so was the price of chardonnay. Both are going through a period of "adjustment" it seems. And there are a lot of people crying the blues.
Harvest - 2002 in Santa Barbara County
Lane Tanner, prominent producer of pinot noir and syrah was telling me last week she expects to be harvesting right around Labor Day this year.
Sherrill Duggan, national sales manager at Buttonwood Farm told me "you couldn't ask for a better growing season. The days have been warm without being too warm. The marine influence-the sea breezes wafting through the vineyards-show up on time every afternoon, keeping the temperatures moderate."
From my perspective in Los Alamos, temperatures have been very even for the past few weeks, with temperatures ranging from the mid 80s to low 90s. Last week valley temperatures were hitting the 90s and low 100s. Last week was a bit of a spike, but over all, this summer has been rather moderate. This allows for slow and even ripening. And overnight lows have been hovering in the low 50s. Several nights last week, lows in Santa Maria and Los Alamos have hit 49 degrees. Cool nights as we experience during the summer on the Central Coast keep the natural acidity in the fruit high.
Despite too much fruit on the vine, at rock-bottom prices, 2002 looks like it will be another splendid vintage. To a great harvest!
Independent wine columnist lives in the Los Alamos Valley and owns the Los Olivos Wine & Spirits Emporium.
