Napa Valley Updates

Friday, March 11, 2011


Lower prices and a smaller harvest combined to push the value of the Napa Valley grape crop down by 8 percent in 2010.

In addition, a remarkably cooler-than-average growing season and extended harvest contributed to the $33 million decline in grape revenues, bringing total value of Napa’s 2010 grape crop to $449 million.

Reflecting a cautious market on the rebound from recession, facts and figures detailing the 2010 harvest are in the Preliminary 2010 Grape Crop Report released Thursday by the California Department of Food and Agriculture.

“There aren’t a lot of surprises (in the state report),” declared Mike Fisher, a partner with the St. Helena wine investment bank, Global Wine Partners. “If there is, it’s how close (the figures) are to 2009.”

Tonnage was relatively close to what was harvested in 2009, Fisher pointed out. The drop in prices could be attributed to non-renewal of growers’ contracts and lower prices on the spot market, where grapes not under contract are sold, he said.

“Even so, we’re still looking at cabernet sauvignon that’s selling for an average of almost $4,500 a ton,” Fisher said.

“Obviously, the recovering, but still fragile, economy had an impact,” added local industry analyst George Schofield. “However, the main culprit may have been the depressing effect of the huge 2009 harvest, as very long and short crops tend to have a one year lag impact on grape prices.”

Fisher predicts “this may be the low point” for grape prices. With the recovering economy, “we may well see a stronger demand (for wine) in 2011” from consumers. “That leads to more wineries wanting to buy more grapes, then to prices going up.”

Tonnage, prices drop

The 2010 grape harvest weighed in at 138,380 tons, down 3 percent from last year’s bumper crop.

Cabernet sauvignon remains king of all Napa Valley grapes, with the crop up by 125 tons last fall, totaling 55,662 tons. Cabernet accounted for 40 percent of Napa’s 2010 harvest.

At an average of $4,478 per ton, the price for cabernet sauvignon dropped 6 percent last year. Still, “Napa cabernet sauvignon grapes alone had a value of $249 million, or 55 percent of the total 2010 Napa grape value,” observed Sue Brewster, who works with Schofield in analyzing trends and issues contained in this and other industry reports.

“Napa chardonnay, a distant second, came in at $60 million, or 13 percent of total crop value,” she added.

Chardonnay tonnage was about equal to what it was in 2009, weighing in at 27,216 tons. The average price for a ton of Napa chardonnay fell 5 percent to $2,211.

The other early maturing Burgundy variety, pinot noir, registered a 15 percent drop, down to 7,395 tons. Pinot noir prices fell 4 percent to an average of $2,472 a ton.

Sauvignon blanc production locally fell in 2010, down 5 percent from a record high the previous year. The sauvignon blanc harvest registered 11,879 tons. There was a price drop of $70, to $1,810 a ton.

Merlot was the second major grape variety that saw a larger crop last fall, up 4 percent to 18,668 tons. But the average price for merlot dropped $50 a ton, to $2,520.

Additional tonnage and average prices for other Napa Valley grapes in 2010 include:

• pinot gris (807 tons, $1,627)

• semillon (707 tons, $2,727)

• viognier (194 tons, $2,530)

• riesling (277 tons, $2,379)

• cabernet franc (2,449 tons, $5,300)

• malbec (920 tons, $3,547)

• petit verdot (1,463 tons, $4,972)

• petite sirah (2,733 tons, $3,099)

• syrah (2,372 tons, $3,033)

• zinfandel (3,116 tons, $2,779).

The highest average price paid for a ton of grapes here last was for rousanne — the Rhone varietal that produces rich, full-bodied wines with honey and pear aromas — at $7,000. But there are only 42 acres of it grown in the county, most of which is planted in Carneros.

Sonoma and statewide

The value of grape crop in neighboring Sonoma County took a big hit last year, a 17 percent drop in revenue, with growers earning a total of $381 million. Tonnage also declined to 189,898 tons, a 10 percent drop.

Sonoma’s chardonnay crop was 10 percent lighter in 2010, weighing in at 65,566 tons, while cabernet sauvignon tonnage was down

8 percent, to 37,574 tons.

Grape prices also declined in Sonoma County. A ton of chardonnay sold on average for $1,844, down 7 percent. The average price for a ton of cabernet sauvignon was $2,082, down 8 percent, less than half the going rate for Napa Valley cabernet sauvignon.

Statewide, the 2010 harvest saw a total of 3,980,229 tons crushed, down 3 percent from 4,095,297 tons in 2009.

Last year, chardonnay accounted for the largest percentage of California’s harvest volume at

16.4 percent. Cabernet sauvignon was second at 11.2 percent.

The average price paid for a ton of grapes in California last year was $543, down 5 percent from the previous crush. While prices were down on average for wine grapes, prices for raisin grapes and table grapes were up by 22 and

21 percent, respectively.

Grapes grown in Napa County received the highest average price statewide again last year — $3,244, down 5 percent from 2009. Sonoma County growers received the second highest return of $2,008, down 8 percent from the previous harvest.