Oversupply in US market not being addressed, claims industry expert
Despite the recent California grape crush dropping by 9% on the previous year, this decline, which would appear to be a step in the right direction for correcting the oversupply in the market, was actually caused by grapes being left unharvested rather than a dip in yields.
“That number is a result of some grapes being left behind. That points to the fact that the tanks were full,” said Jeff Bitter, President of Allied Grape Growers. “Where we estimated that at least 100,000 tons did not get harvested last year, we’re thinking now it might have been closer to 200,000 tons statewide that did not get harvested and therefore did not get accounted for in the report.”
Bitter added that the decline in the grape crush could be attributed to two main factors, Total yields were down around 5% from the previous year and a significant amount of grapes went unharvested due to the lack of demand for more inventory. “Buyers bought all that they wanted or needed and so it kind of leaves us coming out of 2019 with a very ample supply of inventory in the wine business,” Bitter explained.
He noted noted that acreage would have to be reduced in order to address overproduction, and said that 30,000 acres of winegrapes, approximately 5% of current acreage would need to be removed to addrsss the problem of oversupply
“That’s just to balance things, that does not include vineyard acres that would otherwise have come out due to attrition anyway,” he continued. “When you count the fact that attrition is usually 15,000 to 20,000 acres a year, you’re really saying at the end of the day we need 50,000 acres of winegrapes to come out of the ground in order to get us matched to current demand.”