Decline in U.S. wine production

Removals are down 23.6%

measure of wine production is the New York removed about the same amount

fermenters. For crop year 1983, U.S. removals amounted to an estimated 424.8 million gallons, down 23.6% from the 556.2 million gallons removed in crop year 1982, and the lowest amount removed in the last five years.

The decline in U.S. wine production is primarily attributable to California's 2.3 million ton crush in 1983, its lowest since 1976, and well below the record 3.1 million ton crush of 1982. California, the leading wine-producing state by a wide margin, accounted for 90.1% (preliminary estimate) of U.S. removals of standard wine from fermenters in crop year 1983. California removed 382.7 million gallons, or 131.6 million gallons less than in crop year 1982.

wine last two years

million gallons), but because U.S. removals
were smaller in crop year 1983, New York's

California is the leading wine-producing state by a wide margin

share of production rose from 5.2% to
6.9%. Among the other states, no state had
a share of removals exceeding Washington's
.7%. Ranked third among wine-producing
states, Washington has increased its produc

tion in each of the last five years, and its estimated removals of 3.1 million gallons in crop year 1983 represent a 36.6% increase over the amount removed during the same period one year ago.

Wineries in California and New York are clearly dominant in the production of sparkling wine, vermouth, and flavored (OSN) wines. Of these categories, sparkling wine has shown the most growth in recent years. From 1982 to 1983, U.S. sparkling wine production increased by 6.2 million gallons to 37.3 million gallons, an impressive jump of 19.9%. Last year California accounted for 86.6% of the 37.3 million gallons of U.S. sparkling wine production, while New York produced 12.8%. U.S. production of OSN wines was 27.8 million gallons, with 92.5% in California and 6.6% in New York. Ver

'Held at bonded wineries and wine cellars. "Excludes substandard wine held as distilling material or vinegar stock. "Sum of figures for California and Other States may not equal U.S. total because US totals shown are revised ligures and revised figures are not available for individual states • Preliminary includes wine cooler product classified by Bureau of Alcohol, Tobacco and Firearms as "other wine." Sources. Economic Research Department, Wine Institute, Bureau of Alcohol, Tobacco and Firearms and U.S. Treasury Dept.

JULY, 1984

37

'Removals of still wine from fermenters Excludes substandard wine produced as distilling material. Also excludes increases after fermentation by amelioration, sweetening, and addition of wine spirits. "Crop year is July 1 to June 30 Percentages less than 0 05 percent are rounded to zero 'March-June removals estimated 'Possibly understated by as much as 10 million gallons includes states which remove significant quantities of wine but are not reported separately to avoid disclosure of individual operations.

Source: Economic Research Department, Wine Institute; from reports of Bureau of Alcohol, Tobacco, and Firearms, and U.S. Treasury Department.

of the last two years, wine production was considerably higher in 1982 than it was last year, resulting in inventories for December 31, 1983. of 613.4 million gallons compared to the 661.2 million gallons held by California wineries on December 31, 1982. The inventory shipment ratio for 1983 of 1.69, which represents the ratio of December 31 inventories to California wine shipments during the calendar year, was more in line with yearly inventory-shipment ratios during the past decade. In general, yearly inventory-shipment ratios have been in the 1.6 to 1.7 range; however, a large crush combined with slack wine sales can easily push the ratio higher, as happened in 1982 when the ratio was 1.84.

U.S. inventories, with California wine comprising over 92% of the total, were down 6.3% on December 31, 1983 compared to December 31, 1982. Of the 666.1 million gallons of U.S. wine inventories held on December 31, 1983, table wine represented 88.8% of the gallonage. JULY, 1984

1983 grape production well below 1982's record breaker

While the 1983 California grape crop This variety dominates the acreage in the states of Michigan, New York, Pennsylvania, and Washington. Indications are that Washington added close to 3,000 acres of Concords in the late 1970s and early 1980s, which - along with Washington's recent expansion of its wine industry-may partially explain why the state has shown grape crop production increases in each of the last five years.

Waid not match the huge 6.1 million

ton harvest of 1982, its 4,695,000 tons came close to the 4.8 million ton average for the years 1978 to 1982. All indications are that in the coming years California grape production will continue on an upward trend. Between 1975 and 1983, bearing acreage of grapes in California increased by 13% to 644,513 acres, and it is estimated - based on actual non-bearing plantings - that by 1985 there will be an increase over 1983 acreage of 49,000 bearing acres. With yields also trending upward, it is likely that there will be more 6-million-ton crops in California's future.

U.S. grape production in 1983 was 5,281,200 tons, well below the record 6,554,200 tons of the previous year. California's 4,695,000 tons made up 88.9% of the total, and "other states" produced 586,200 tons, or 11.1%. The "other states" tonnage was well above 1982's 478,200 tons, and exceeded by 107,300 tons their 1978 to 1982 average tonnage of 478,900 tons. Washington and New York had above average crops, exceeding their 1982 production by 57,100 tons and 34,000 tons, respectively. The combined crops of Washington and New York accounted for 71.1% of the "other states" 1983 grape production. Pennsylvania (62,500 tons) and Michigan (60,000 tons) were also large producers among the "other states."

Concord grapes accounted for 78% of all grapes harvested in "other states" in 1983.

As a whole, states other than California do not have substantial non-bearing acreage, and it is unlikely that these states will experience the type of growth in grape production projected for California.

The biggest story in California in 1983 was not the size of the harvest, which was slightly below the 1978 to 1982 average of 4.8 million tons, but the way in which the harvest was utilized. Because California vintners had large wine inventories in the fall of 1983, the demand for raisin variety grapes for crushing was weak. More raisin variety grapes were dried than in past years, and the total grape tonnage used to make raisins (1,747,500 tons) set a peace-time

record.

Production in all three varietal classes of
grapes (wine, table, and raisin) in Califor-
nia was below 1982 levels, and only the
table variety class among the three exceed-
ed its 1978 to 1982 average. Table varieties,
at 475,000 tons, were 21,000 tons above the
1978 to 1982 harvest average, while last
year's production of wine varieties was
1,870,000 tons, or 75,000 tons below the

UNITED STATES GRAPES: PRODUCTION, QUANTITY CRUSHED,
AVERAGE GROWER PRICE AND FARM VALUE, BY STATES
1982 and 1983

226 000

586.200

224.000 559,160 5.281,200 2,842,160

303 00
155 00

973 2.285 10,646 455 34.773 124.349

15,330 15.100
10.500
2,520
1.229 2.800
11.662 58.500
1,249 2.500
157.000
43.228
4.500
9,000
47,000
2,400
168.900
478.200

10,300
1,320
56.500

991.00
238.00

473 00

201.00

2.200

320.00

154,000
3.600
8.700
45,100
2,000
168.200
451.920

234 00
321 00
227 00
225 00

289.00

185 00

239 00

Washington

Total Other States

Total US

14,964 2,504 1,231 11,758 800 36.777 1,444 2.040 10.585 693 31.299 114.095

213.00
255.00 1,348.702 6.554.200 3,575.220 232 00 1,360,922

'Crushed for all purposes 'For all grapes sold Prices for the fresh component in California represent returns at
the first delivery point. In other states they represent average prices producers received at the point of first sale,
except for Oregon and Washington where they are equivalent returns at the packing house door Prices for the
processing components (ie, canned, dried, crushed) represent equivalent returns for fruit delivered to the pro-
cessing plant door, except in California where grapes for crushing and raisins are equivalent returns at growers'
first delivery point in the district where grown Calculated based on negotiated free tonnage price for raisins "Value
of utilized production, does not include value of production losses. Calculated based on negotiated tree tonnage
price for raisin component

Sources Economic Research Department, Wine Institute, California Crop and Uvestock Reporting Service and Crop
Reporting Board, US Department of Agriculture.

average harvest for the previous five years. For raisin varieties, the comparable figures are 2,350,000 tons produced and a drop of 4,000 tons below the five-year average.

The upward trend in per acre yields for wine and raisin varieties did not continue in 1983, as acreage increases in both varietal classes failed to result in higher levels of production. It is not unusual for a smaller than average crop to follow an exceptional growing year, and one should not read a great deal into 1983 yields. With the present maturity level of vineyards in California-unless there is an unforseen change in prevailing viticultural practices - it is expected that the upward trend in yields will continue into the mid-1980s.

The yield for wine varieties in 1983 was 6.22 tons per acre, a 24.5% decrease from the record 8.24 ton per acre yield of 1982. Table and raisin varieties per acre yields, at 6.59 tons and 8.65 tons respectively, were down 27.0% and 26.3%.

The 1983 California grape crush of 2,300,660 tons was the smallest crush since the 2.21 million ton crush of 1976. Last year's crush of wine varieties in California (1,786,787 tons) represented 77.7% of all grapes crushed. Initially, the total California grape crush and the wine variety component were reported as 2,283,000 tons and 1,780,000 tons respectively and are so shown in the production and utilization tables. The revised figure for raisin varieties is 328,866 tons and for table varieties 185,008 tons.

In 1983 the crush of white grapes finally surpassed the crush of red grapes, reflecting shifting trends in recent years away from the planting of red varieties and toward both the planting of white varieties and the conversion of some reds to whites through grafting. Of last year's wine variety total, 54.7% were white varieties and 45.3% were red. In 1982 the comparable figures were 47.9% white and 52.1% red. Less than a decade ago, red variety winegrapes made up well over two-thirds of the crush.

In 1983 Colombard, Thompson, and Chenin Blanc were the three top varieties crushed; however, while the amounts of Colombard (456,031 tons) and Chenin Blanc (244,335 tons) crushed in 1983 were close to their 1982 levels, the Thompson crush fell from 698,425 tons to 286,661 tons, a 59% drop. The low crush of Thompsons was primarily due to the shifting of these grapes to raisin production.

California growers received an average price (revised data) of $190.98 per ton for all grapes crushed in 1983, down 1.6% from the 1982 average of $194.07 per ton. While the average price per ton to growers was down slightly in 1983 compared to 1982, there were significant increases and decreases in prices paid for certain varieties. The three most abundant varieties crushed had larger than average declines. Listed below are selected varieties which fell significantly in price:

Thompson, down 20% (from $126.42 per ton to $109.09); Chardonnay, down 10.5%

WINES & VINES

(from $1,094.22 to $979.79); Chenin Blanc, down 11.1% (from $216.69 to $192.63); Colombard, down 8.1% (from $170.46 to $156.68): Sauvignon Blanc, down 18.1% (from $595.04 to $487.11); White Riesling, down 22.3% (from $554.62 to $430.83); Cabernet Sauvignon, down 14.8% (from $541.44 to $461.44); and Zinfandel, down 9.7% (from $297.93 to $268.96).

Grape varieties for which growers received higher average prices last year than in 1982 include: Burger, $143.92 in 1982 and $150.60 in 1983; Pinot Noir, $492.76 and $515.99; and Rubired, $103.66 and $113.92.

It is notable that the price for grapes remained low even though the crush was small, and that in general the varieties used for premium wines were not immune from the lower price structure.

The preliminary report of raisin production for 1983 was 390,200 tons, 32.1% more than the 295,300 tons produced in 1982. Because of the high 1983 production, there has been a significant buildup of raisin inventories. A raisin industry price-cutting strategy, which may halve originally reported grower returns, has recently been implemented in an attempt to reduce the over-supply. Average grower returns and farm value of the grape crop as shown in the accompanying tables are calculated on a negotiated price for raisin tonnage designated for free market disposition. The new price cutting strategy will significantly alter these preliminary figures.

For the second consecutive year raisin shipments were down 2.6%. Raisin shipments in crop year 1982 were 255,000 tons, natural condition basis, 6,900 tons less than the 261,900 tons shipped in crop year 1981. Shipments to the U.S. and Canada were up 1.5 percent, from 193,000 tons to 196,800 tons; however, for the third year in a row exports declined. Exports were down 9.4% in crop year 1982 to 54,800 tons. In the fall of 1983, the raisin industry took steps to implement an export incentive program as well as an advertising and promotion campaign in Western Europe. Whether these actions will reverse the trend remains to be seen. The (Cont. pg. 46)

'State figures except California are by state where grown and include grapes crushed at facilities in
other states California figures include only grapes crushed at California facilities Crushed mostly
for unfermented juice, jams, jelbes, etc. Some of the processed grape material may be shipped to
wineries and distilled spirits plants. Includes a minor amount crushed by facilities other than wineries
or distilleries but not reported separately. "Breakdown of crush not reported to avoid disclosure of
individual operations. Quantity included in "other states." "Georgia and South Carolina. Also includes
Michigan.

Sources: Economic Research Department, Wine Institute, from reports of Crop Reporting Board, U.S.
Department of Agriculture

180.950 66,750 241,350 3,794 3,948 237,900 225,160 63,130 292,646 243,120 3,978 64,709 3.986 317,918 63,487 241,059 4,017 313,654 240,446 62,497 61.839 4,558 292,503 62,506 2,692 5,124 290,686 278,935 1,779 3,993 63,481 3,062 6,076' 291,413 67,783 2,350 4,695 72,041 300,644 'Preliminary in 1982, 690.000 tons were unutilized.

489,050
526,190

6 84

8.73

8.16

7.76

5.83

6.88

9.25

7.50

600,475

4.52

6.26

9.25

6.62

622,464

4.92

7.69

8.03

6.40

Source. Economic Research Department, Wine Institute, California Crop and Livestock Reporting Service, Crop Reporting Board and U.S. Department

of Agriculture.

JULY, 1984

41