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DECEMBER NEWS Top Stories The month in perspective Large 2013 Grape Crop Assures Sufficient Supply California Wine Grape Crush Tonnage 5 Millions of Tons San Rafael, Calif.—The West Coast wine harvest of 2013 finished in early November with a large crop that potentially matches the record quantity of 2012, re-supplies the bulk wine market and eases any fears that wineries would lack the immediate supply needed for growing consumer demand. The harvest achieved very good overall quality parameters due to nearly ideal growing conditions through most of California and the Northwest. Estimated at 4 million tons in California—and with a value approaching $3 billion based on last year's average price of $738 per ton—the wine grape crop pleased most growers. Previously contracted prices prevailed at nearly the same high levels as 2012. When the total is tallied, California could exceed 4 million tons again this year to supply its 3,579 wineries, said Nat DiBuduo, president of 600-member Allied Grape Growers based in Fresno, Calif. The official California Grape Crush Report calculated the 2012 harvest at 4.01 million tons from 546,000 acres of grapes; its preliminary report on 2013 is expected in February. The harvest could have been even larger, said DiBuduo, who is known for sharing the most ac- 4 Consensus on supply 3 2 1 0 state, pruning decisions to encourage higher yields and a low demand for Thompson Seedless grapes in the San Joaquin Valley all contributed to the supply of grapes harvested for wine. Washington, the second-biggest grape-growing state on the West Coast with 50,000 acres of wine grapes and 676 wineries, expected a clearly record-breaking crop of possibly 200,000 tons. Ste. Michelle Wine Estates processes more than 60% of Washington's harvest and projected a 10% or greater increase from 2012. The Oregon Wine Board expected a harvest reaching or exceeding the previous record tonnage of 40,200 tons from the state's 20,000 acres. Problematic weather disturbed the growing season, but growers intervened to manage disease pressure, then the weather cleared in mid-October for a dry harvest ending in early November. 20092010 20112012 2013 estimate Sources: USDA NASS; estimate, Allied Grape Growers curate unofficial tonnage and acreage estimates in the state. He said that many wineries delayed picking and even rejected some vineyards because they didn't have sufficient tank space. Grapes harvested late went up in sugar, down in tonnage and down in price if they were in excess of contracted amounts. What led to the large crop Two consecutive large crops with good overall quality are unusual but not unprecedented due to the variability of weather and the physiology of grapevines that make them dependent on the previous year's growth cycle for the current year's crop size. Newly productive acreage around the Grape and wine brokers, winery groups and grower organizations are building a consensus that the West Coast wine industry has a temporary surplus of grapes but still faces a long-term shortage unless new plantings continue to increase. Two large crops means tanks and barrels full of perishable wine, most of which must be moved to consumers in the next two years. That means downward pressure on prices, said Steve Fredricks, president of Turrentine Wine Brokerage in Novato, Calif. However, the statewide total has limited meaning to wine companies, Fredricks said, since wine brands are based on the grapes of various regions and their microclimates. "You can't just shift a white wine from the southern San Joaquin Valley and it becomes Napa Valley Chardonnay." Fortunately, in 2013 both of those microclimates and practically all the others had good quality harvests and at least average or better yields. —Jim Gordon Report of Global Shortage Neglects 'Wine Lake' in Europe San Rafael, Calif.—Released on the heels of the second consecutive large harvest in California, a report from Morgan Stanley warning of a global wine shortage stunned growers and vintners in the state, where the 2013 harvest heralded a return to a comfortable supply for the short term. But industry experts from bankers to growers' associations agreed that the report's conclusion ignored an existing European wine surplus that, according to California's Wine 14 W in es & V i ne s D ECE M B E R 20 13 Institute, had "plagued the wine sector for decades." Setting the stage In 2012 wine production decreased in the top three wine-producing countries, according to the USDA, which noted production was down 19% in France, 8% in Italy and 5.6% in Spain. According to Gladys Horiuchi of the Wine Institute, the sharp decline was expected. "The European Union has had an excessive wine supply for decades. Everyone knew about 'the lake,' and they finally did something about it," she said. That something was a planned vineyard removal program carried out between 2009 and 2011. Many of the vineyards removed were in lower quality winegrowing areas. The Wine Institute declared in August that the countries' diminished harvests put a sizable dent in the existing surplus, stating: "The 2012 wine surplus is estimated at 199.3 million gallons compared to 555.3 million gallons in 2011 (-64.1%) and 1.7 billion gallons in 2005 (-88.2%)." The effects of 2013 France experienced a difficult and in some areas disastrous harvest in 2013, diminishing its potential supply, but Spain and Italy rebounded. On Nov. 1 the French Ministry of Agriculture reduced its forecast for the 2013 grape harvest to 1.117 billion gallons after Oc-