The Three Horsemen of the Grapepocalypse, Part 2: The Coming Recession
Three weeks ago, I posted my first installment of this series about the coming Grapepocalypse, which discussed the effects of the changing grape market cycle. I promised some more doom and gloom, but it took me a bit to get this article out. Unfortunately, both of my young children fell ill and in the 4th incident in 15 months of PG&E equipment failure on my homestead, my computer was fried, among other damage done. So, I apologize for the delay. Of course, there is no bett
Maybe Napa Cabernet Sauvignon Prices Aren't That High!
My two favorite people from Uppsala are both named David. The first is David the Gnome and the second is David Morrison at The Wine Gourd blog. I’ll refrain from extolling the virtues of David the Gnome for now and focus on David Morrison. Frankly, he does some of the best quantitative analysis of any wine blogger out there. If you would like to understand the economics of the wine industry, his blog is a must-read. His latest post, “Napa cabernet grapes are greatly over-
Inflation-Adjusted Napa Cabernet Sauvignon Prices
As part of my continuing project to make available to the industry charts from different projects I've worked on, here is a chart of Napa Cabernet Sauvignon pices, from Table 6 of the crush report, going back to 1991, in 2014 dollars. The chart shows the middle 50% of price outcomes with a black background to highlight how inexorable and aggressive the price rise has been. It really is amazing when you keep in mind that these numbers are adjusted for inflation! Feel free to
The Napa Paradox - Cabernet vs. Diversification by the Numbers
In May I presented at the Vineyard Economics Seminar. One topic I focused on was the paradox of the continuing concentration on Cabernet Sauvignon in Napa. The graph below shows the total percentage of Napa acreage that is Cabernet Sauvignon in purple. Over the past twenty years, Cabernet Sauvignon went from making up 30% or so of all Napa plantings to 42%. That concentration continues to grow slowly, although it is accelerating. In the graph below, we can see that total
Napa Merlot Prices for 2014
Today’s grape price projection is Napa Merlot. To me, it’s a grape that is playing tug-of-war with itself, in a statistical sense. On the one hand, it works as a blending grape for Napa Cabernet and Meritage. On the other hand, it works as a varietally-bottled wine. On the one hand, it is a Napa grape and therefore the market is strong. On the other hand, an off-hand, drunken comment from a fictional character played by Paul Giamatti has destroyed the market for Merlot.
The Verdict is In: Napa Cab Prices Are No Longer Cyclical, So What Now?
In the last post, we looked at the changing dynamics of modelling county-wide averages for Napa cab prices by year. My suggested method for dealing with the uncertain and changing nature of predicting cab prices was to use a combination of scenario and sensitivity analysis. I went ahead and did this myself and the exercise has yielded new insight into Napa cab price modeling that I would like to share here. Before we delve into that, though, I would like my readers to unde
Breaking the Cycle: Projecting Grape Price into a Saturated and Ambiguous Future
Here is the previous post in a normal in-blog setting (some issues with graphics due to my host having some troubles with multimedia posts.) I was recently talking with a colleague about where grape prices are going and he expressed his belief that some winegrapes’ prices are no longer subject to the 14 year cycle (from crest to crest) that has historically determined grape prices. I hear this a great deal in various forms, but I also hear from people who have been in this i
Breaking the Cycle: Projecting Grape Prices into an Ambiguous Future
So, my website host is having technical difficulties with blogs that contain multiple images. So, I've had to build out a new page for this blog. Just click here to read it. #grapecycle #cab #cabernetsauvignon #chardonnay #grapepriceprojections #napa #napacounty #sonomacounty
Where are Napa Cabernet prices going?
Cabernet Sauvignon from Napa is the market leader in grape prices and that is not going to change anytime soon. In fact, it will not surprise many of my readers to hear that prices are almost certainly going up. But by how much? My Projections I use my own proprietary methods to project prices. I have two methods: one is used for long-term projections and attempts to predict cyclical effects. It is meant for long-term planning and must be adjusted annually, since the data t
