Sacramento, Calif.—After two boom years, California’s wine grape harvest shrunk 7.9% to 3.91 million tons, following the record 2013 crush of 4.25 million tons. Today’s release of the Preliminary Crush Report by the USDA’s National Agricultural Statistics Service revealed interesting trends but few real surprises for wine industry professionals who study the wine and grape markets year-round.

“Red wine varieties accounted for the largest share of all grapes crushed, at 2,134,995 tons, down 11.7% from 2013,” according to the report. “White wine variety crush totaled 1,775,183 tons, down 3% from 2013.”

Perhaps reflecting the reduced harvest, red wine grapes drew an average of $883.45 per ton, up 3.6% from 2013; white wine grapes, on the other hand, averaged $588.30 per ton, down 5.6% from 2013, statewide.

“In 2014, Chardonnay continued to account for the largest percentage of the total crush volume with 17.2%. Cabernet Sauvignon accounted for the second leading percentage of crush with 12.3%,” the report stated.

For reporting data, California is divided into 17 districts. District 13 (Madera, Fresno, Alpine, Mono, Inyo Counties; and Kings and Tulare Counties north of Nevada Avenue [Avenue 192]) had the largest share of the state’s crush, with 1.36 million tons. The average price per ton in District 13 was $305.69.

Not surprisingly, North Coast districts raked in the highest prices for wine grape varieties: Napa County (District 4) pocketed an average price of $4,064.95 per ton, up 10% from 2013. District 4 Cabernet Sauvignon averaged $5,930 per ton in 2014. District 3 (Sonoma and Marin counties) received the second-highest return of $2,313.82, up 3% percent from 2013.

Statewide, the 2014 Chardonnay price of $858.26 was down 1% from 2013, but the price of Cabernet Sauvignon ($1,412.92) was up 5%. The 2014 average price for Zinfandel was $621.84, down 5%, while the average price for Merlot was up 2% from 2013 at $771.21 per ton, according to the report. Syrah prices were down $17.81, to $751.80 per ton. Petite Sirah was down $6.47 to $1,054.73 per ton.

Other popular white wine grape varieties remained stagnant or reduced in tonnage: Pinot Gris/Grigio grew slightly: 181,800 tons in 2014 vs. 178,887 tons in 2013; Sauvignon Blanc accounted for 110,146 tons vs.127,679 tons in 2013; Viognier fell to 24,488 tons after totaling 28,157 tons in 2013, and despite its vaunted resurgence in the popular market, Muscat Blanc showed just 39,928 tons were harvested in contrast to 48,476 the previous year. At 159,857 tons, Muscat of Alexander was up 27.4%.

Pinot Noir, Merlot and Syrah all lost tonnage in 2014: Pinot Noir logged 249,962 tons in 2014 vs. 259.897 tons in 2013; Merlot plummeted to 219,034.3 tons vs. 273,390 in 2013; Syrah fell to 113,602 vs. 2013’s 132.568 tons statewide—although Napa County tonnage increased, according to Steve Fredricks, president of Turrentine Brokerage.

Grenache (Garnacha) production fell from 65,800 tons in 2013 to 52,671 tons in 2014; for the “blue tooth” crowd, Petite Sirah edged up to 20,671 tons vs.18,246 in 2013.

Experts weigh in
Shortly after the release, Turrentine Brokerage’s Fredricks told Wines & Vines he found little of surprise in the report. “Perhaps most interesting is the decrease in red grapes,” he said, noting that much of that was represented by Zinfandel, and “a lot of that is crushed for white Zin.”

While the Chardonnay crush was down 27,000 tons in the Lodi region, “People had good crops, still above the five-year average,” he said. He also sees growth in the $10 per bottle and up premium market. “We’ll be able to produce good $10 bottles for satisfied customers,” he said.

Prior to release of the report, Wines & Vines consulted with industry observers. Glenn Proctor at the Ciatti Co. commented, “In the end, it appears to be a very healthy crop, the third in a row. In 2011 the industry was tight, but we’ve replenished our inventory.” He recalled that in September 2014, “We had 33 million gallons in bulk, a historical high. There is significant inventory on the market today.”

“Syrah is used mostly in coastal wines as a blending wine,” Proctor noted. When Ciatti asked coastal vintners what variety they needed most, the answer was Cabernet Sauvignon. For example, the Crush Report showed that Cabernet Sauvignon in District 8, which includes Paso Robles, averaged $1,463 per ton.

The least demand was for Syrah. Cabernet is rarely used as a blending wine, especially in coastal wines, and it’s hard to find in bulk; “Merlot is more often used in red blends,” which have also seen rising popularity in recent years.

Proctor sees increased activity in case-goods sales. “Sales appear positive for cased goods in the $12-$15 (per bottle) price range, especially for Napa and Sonoma County wines,” he said. Proctor observed that bottle sales at the $9 per bottle “everyday” category have decreased in volume. He suggested that consumers might be moving up to premium wines.

Imbalances of inventory and demand in California’s interior growing regions will probably affect grape and bulk sales, Proctor predicted. He noted that agricultural land is growing in value; farmers with increased equity in the Central Valley are looking at profitability. Some 25,000 to 40,000 acres of grapes are being pulled, as landowners move to almonds, he said.

In his presentation at last month’s Unified Wine & Grape Symposium, Jeff Bitter, vice president of operations at Allied Grape Growers, predicted the total crush at 3.9 to 4.1 million tons. He noted that Cabernet Sauvignon and Chardonnay “are not in short supply,” and that Pinot Noir—especially from Monterey —is abundant.

NASS’ final report is scheduled for release March 10. Growers who have changes should report to USDA prior to Feb. 20 by emailing nass-ca@nass.usda.gov or calling (916) 498-5161.