Mid-February’s publication of the California Department of Food and Agriculture’s preliminary 2022 grape crush report – showing 3.349 million tons crushed, the lowest figure since 2011 – has failed to stimulate extra activity on California’s grape wine and bulk markets. Such hesitant activity after a fourth-successive sub-4-million-ton crop starkly illustrates the underlying demand weakness, which – to some extent – applies even in those areas that traditionally command the highest premium.
The disconnect between supplier and buyer price expectations – on grapes and bulk wine – is continuing and by now well-documented: This month’s report again outlines the impasse in deal-making that this is producing. If there is any vineyard news that has impacted the market in the past four weeks, it has come not from the pages of the crush report but from the weather bulletins, which have shown a very wet few weeks across California.
State-wide snowpack was at 190% of normal as of March 3rd and even some low-lying areas have received some rare snowfall; every Coastal reservoir is at full capacity and the soil profile in many places is full; the area of California in some level of drought has reduced from 100% to 83% and this decline is forecast to continue into spring, with further precipitation expected through March. In addition, temperatures are projected to be below-average through the month, potentially reducing the risk of premature budbreak during the frost risk period.
While all this is welcome for a state that has long been beleaguered by drought, there is a sense you can have too much of a good thing: Growers will soon be impatient to get into the vineyards to start work, and the present conditions could lead to delayed budbreak, pushing the growing timetable back as the soil takes time to warm up.
If the below-average crops of recent years have been at least partly attributable to drought conditions, then it follows that the current precipitation relief will cause some buyers to wonder how big the 2023 crop will be. There is an awfully long way to go between now and picking, and Mother Nature can – and usually will – intervene at any time, but the present conditions add another hesitation factor to buying behaviour already inhibited by robust prices, lower consumer sales, squeezed margins and little forward visibility on consumer confidence and input costs.
We are trying through our monthly report to help elucidate the market as it stands, a task currently proving more challenging than ever. However, Ciatti can draw on decades of experience to help buyers and sellers navigate the twists and turns of what 2023 and beyond will bring: Don’t hesitate to get in touch with us direct. In the meantime, read on for our latest analysis of the bulk wine and grape markets.