Have California Winegrape Prices Been Increasing in Price in Real Terms?

July 9, 2015

Anyone can take a look at the crush report - you can do so really easily using one of my Excel-based tools - and see that grape prices have been increasing. Are they increasing faster than the rate of inflation?  As you can see from the chart below, the short answer is yes.

 

 There are a number of conclusions you can draw from this chart but, since I am buried in work I'll leave that mostly to you.  I will throw in a couple of caveats in here, though.  First of all, the Consumer Price Index measures the cost of living, it does not measure the cost of producing grapes.  That is to say that grape production has its own, idosyncratic, rate of inflation and it is higher than the CPI.  Second, this is not, in and of itself, an indication that grape prices are too high.  These earlier blog posts of mine address that issue:

 

http://www.vineyardfinancialassociates.com/#!Are-Grape-Prices-Rising-Too-Fast-By-the-Numbers/chh1/5523da9d0cf21e26badcc341

 

http://www.vineyardfinancialassociates.com/#!Are-Grape-Prices-Rising-Unsustainably/chh1/551ae39a0cf21e26bac2d721

 

 

Listened to while writing this post:

"A Tribute to Muse, " by the Tallywood String Quartet

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