Late heat starting to influence vineyards and the market
Devoid of weather extremes, September was perfect for vineyard conditions across California and harvesting proceeded smoothly through the month. However, October ushered in an unseasonable heatwave, with triple-digit temperatures registered in some areas and a number of temperature records broken. The resulting speed-up in sugar accumulation has intensified picking and, in turn, necessitated quicker decisions in the vineyards and on the grape market: To pick or not pick, to custom crush or not custom crush, to buy extra grapes or not buy extra, etc.
Prior to the heat’s arrival, grape quality across the state appeared very good and – as of October 9th – no widespread deleterious effects of heat on quality had been reported. By that date, something like 60-65% of the harvest was complete in the North Coast. Until the heat, the North Coast’s crop – assisted by some sizing during cooler spells back in August – appeared to be coming in average-sized overall, but there have since been reports of some yields being reduced by the heat: On October 7th we received reports of Alexander Valley and Napa Cabernet yields coming in 20-30% lower than expected.
As forecasted, tonnages in the Central Coast appear to be coming in lighter the further south the vines are situated, and a shortfall is expected in Paso Robles. The Central Coast’s harvest is perhaps 30-40% complete, with picking of the main body just getting underway, so the region’s overall crop remains hard to gauge: Of what has come in so far, the shortfall from the average is perhaps running at 20-30%. The Interior’s harvest, meanwhile, is approximately 85% complete: The whites are estimated to have come in around 15-25% short of their averages, the reds shorter to a lesser extent, perhaps 5-10%.
Accurately estimating a state-wide crop size remains challenging. But given the number of downward pressures at play this year – vine removals estimated at 30-40,000 acres, perhaps as much as 20-30% of the state’s wine grapes still uncontracted, yields coming in lighter than average to varying extents – we believe something like 3.2-3.3 million tons crossing the scales is a possibility. This would place the 2024 crop below 2021 and 2023’s 3.6 million tons and closer to 2022’s 3.3 million. Some even forecast a crop below the 3-million-ton mark. As the saying goes, “time will tell”, and it especially applies this year with the heat a late factor still playing out at the time of writing.
The wine industry continues to undergo a painful reset, i.e., becoming smaller. Until such time as there is retail sales stabilization, and the larger buyers concertedly and consistently require inventory, shoring up market prices that are sustainable for suppliers, the bulk wine and grape markets will remain slow and prices low, and some parties will be forced to exit the industry. Some predict an imminent stabilization of sales; others hope for a rapid swing-back, in which rightsizing of production to match market need is shown to have already been achieved or has even overreached; others dread a longer wait for better sales news.
Some highly attractive opportunities currently exist on bulk wine and grapes. Read on for the latest and – for the most up-to-the-minute information on the harvest and availability – get in touch with Ciatti directly. The broker team stands read to draw on over 130 years of collective wine industry experience to help buyers and sellers navigate this challenging time.
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