District-by-District Review of the Crush Report

March 17, 2015

This was posted recently in the Wine Industry Advisor.  It is the first part of a three-part review of the crush report by district.

 

District 1: Mendocino County, Average Price Per Ton: $1,493.10

Overall Price Shift: +3.26%, Overall Change in Yield: -20.27%

 

Mendocino County saw healthy price growth and reasonable yields, though crop volumes were down 20% from 2013’s large harvest. Most of the price gains accrued to reds, although Riesling, Sauvignon Blanc and Gewürztraminer saw gains of roughly 6%, 9.5% and 12% respectively. Per ton prices for those varieties were $1,845.28, $1,285.67 and $1,305.99, respectively. This is one of the few districts – or maybe the only one – in which Bordelaise whites are priced lower than Alsatian whites.

 

Increasing demand drove Cabernet Sauvignon prices up by about 10% to $1,852.88 while Pinot Noir, on the other hand, saw an increase of under 3% to $2,729.06. The Crush Report does not include any sub-appellation pricing, but my own estimates have Anderson Valley Pinot Noir at somewhere very close to $4,000 per ton in 2014. Interestingly, though Zinfandel prices were up just over 3%, the nearly 200 tons of Primitivo harvested in Mendocino County rose by over 8.5% to $1,556.43, passing Zinfandel’s per ton price of $1,514.76. Less important red varieties tended to rise, some by double-digit percentages.

 

 

District 2: Lake County, Average Price Per Ton: $1,518.93

Overall Price Shift: +6.81%, Overall Change in Yield: -10.50%

 

Lake County had another great year, with a smaller reduction in harvest volumes than Mendocino and higher per ton prices than Mendocino County for what I think is the first time ever. Reds increased by nearly 12%, while whites went up by a smidge over 2%. The greatest driver of this increase was the   16 ½% increase in the price of Lake County’s 14,000 plus tons of Cabernet Sauvignon, which just barely broke the $2,000 per ton mark for the first time ever. Other red Bordeaux varieties moved up a few percentage points. Petite Sirah increased by more than 6% to $2,138.60, while Zinfandel remained essentially flat at around $1,650.

 

Much of the increase in whites is due to the over 40% increase in the price of Lake County Pinot Gris to $846.67 a welcome relief to Pinot Gris growers in the County, who are getting only about 4 tons to the acre at these low prices. The other big factor was the over 2 ½% increase in the price of the County’s 12,000 or so tons of Sauvignon Blanc. Semillon rose over 10% to $1,156.19, while Viognier, Chardonnay and Riesling fell by over 3%, 3% and 5% to $1,323.18, $1,174.19 and $1,157.79, respectively.

 

 

District 3: Sonoma and Marin Counties, Average Price Per Ton: $2,318.92

Overall Price Shift: +3.11%, Overall Change in Yield: -4.66%

 

In terms of revenue, Sonomarin had almost as good of a year as last year, with a healthy gain in price and a relatively low drop in yields. Reds outpaced the price growth in whites only moderately. Over 75% of white wine production in District 3 is Chardonnay, which rose over 2 ½% to $1,990.38. The next most important white by a wide margin is Sauvignon Blanc, which did better, increasing over 4% to $1532.51. In third place, by an equally large margin in terms of order of magnitude is Pinot Gris, which increased by less than 1% to $1,686.67. Notice that District 3 Pinot Gris is more expensive than Sauvignon Blanc even though statewide Sauvignon Blanc is roughly 65% pricier than Pinot Gris.

 

At over 45,000 tons each, Sonoma County’s most important reds are Pinot Noir and Cabernet Sauvignon. Cab saw a healthy price increase of over 4 ½% to $2,614.37, while Pinot rose just over 4 ¼% to $3,251.49. Similar to statewide pricing, Cabernet Franc rose over 7% and traditional Port varieties took a healthy increase, with Touriga Nacional leading the way by more than doubling. Zinfandel rose less than 2% to $2,543.78.

 

 

District 4: Napa County, Average Price Per Ton: $4,077.31

Overall Price Shift: +10.46%, Overall Change in Yield: +1.52%

 

Napa continues on its ascent to a completely different plane than the rest of the California wine industry. Yields increased, Brix ticked slightly downward and prices skyrocketed by more than any other district other than District 15, whose total yield is less than 350 tons. White varieties saw a price increase of less than 2%, although some very minor varieties saw double-digit increases. The three most widely produced whites in Napa are, in order, Chardonnay, Sauvignon Blanc and Semillon. Prices rose by roughly 1%, ½% and 9%, respectively, to $2,499.66, $1,909.80 and $2,831.59.

 

The red Bordelaise varieties all did very well (see chart below), but what really buoyed the overall price rise were higher prices for less important varieties. Examples include Carignane, whose 2,158 tons rose in price by over 14% to $2,840.12 and Sangiovese whose 540 tons rose over 20% to $3,354.35.

 

Variety                                Price                           Increase                      Yield (tons)

Cabernet Franc                 $5,718.27                     8.27%                         3,664.2

Cabernet Sauvignon        $5,923.36                     7.73%                         69,529.8

Malbec                                 $4,525.62                   10.29%                         2,518.7

Merlot                                   $2,977.06                    6.63%                         18,922.5

Petit Verdot                          $5,466.93                    6.94%                         2,856.9

 

 

District 5: Solano County, Average Price Per Ton: $838.65

Overall Price Shift: -0.43%Overall Change in Yield: +10.92%

 

Solano County saw prices inch down by a tiny bit, while yields jumped more than in any other district. The acreage report doesn’t arrive until April, but I know there has been a great deal of planting in Solano. My guess is that per acre yields probably dropped a bit, as in other areas, but that many new acres are coming into the bearing age. The new supply seems to be causing the slight depression in prices, though this dynamic may change as Solano’s grapes become more widely accepted in premium bottles due to planting saturation in more prestigious parts of the North Coast. Curiously, the Crush Report is showing a 0.97% drop in Solano’s prices for whites and a 2.28% drop in Solano’s prices for reds. This, of course, makes no mathematical sense. I’m not going to take the time to sort this out, but I have notified the appropriate agency.

 

Solano’s most important varieties are Chardonnay, Pinot Noir, Pinot Gris, Cabernet Sauvignon and Merlot in that order. The first four saw prices fall by between 1-5%, while Merlot, surprisingly, rose by about 5 ½% to $1,036.32. I’m surprised to see that Cab fell in price to $1,689.31, when buyers have been aggressively pursuing Cab in other parts of the North Coast. Also surprising is that the over 300 tons of Syrah grown in Solano rose over 60% to $1,398.58. While there is nothing in any of these finding that I specifically doubt, the fact that the findings are so surprising, combined with the fact that the figures do not add up in an arithmetic sense, do cause me to wonder if all of this is actually true. Is Solano Syrah really going for more than Syrah from Mendocino and Lake Counties? Especially when it trailed those counties by about $500 last year?

 

Sorry to leave you with questions about the Crush Report’s accuracy, but that’s what I’ve got for now. And to be clear: I think that 99% of the numbers in the Crush Report can be trusted 100%. Stay tuned for a look at the Central Coast.

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