Long-term grape contracts require a mechanism to dictate price throughout the term of the contract. These mechanisms can make an enormous difference in the profitability of the contract for both sides. The chart below is an illustrative case study. It assumes a three-year contract was signed for District 11 (Lodi) Zinfandel that was priced at $900 in 2015. Six types of escalators/indexes are examined: Inflation: Some contracts index to inflation, which I typically define a
As part of my push to release graphs I have made to the industry for their use, I am posting this graph that shows for five top varietals, what the average price per ton was in District 3, the average tons per acre and the total revenue per acre. District 3 is Sonomarin, which is 99.8% Sonoma County and about 0.2% Marin County. Hope someone finds this useful or at least interesting. Use the chart as much as you'd like, however you'd like, but please leave in the attributio
Sonoma County Zinfandel Update In 2013, District 3 Zinfandel sold for an average of $2498.88 per ton. In case you’re not familiar with the USDA’s pricing districts, District 3 consists of Sonoma and Marin Counties. I had predicted that average price per ton would rise to $2586.23 in 2014. In fact, it did rise, but only to $2543.78 – about $46 or 1.8%, outpacing an inflation rate of 0.8%, according to Department of Labor data. Yields, on the other hand, fell by 22%. Avera
In the last blog post, we took a look at where statewide winegrape prices are going. That analysis requires looking at many different grape types, across varieties and appellations. In this post, we’ll look at a specific case: Sonoma County zinfandel. In fact, we’ll look at a specific vineyard that I’ll use as an example (everything is kept anonymous, of course, so pardon the bad, fake names.) The projections that are used as a basis for this analysis are valid for Sonoma Cou
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