I was recently asked by the El Dorado Wine Grape Growers Association to produce recommended prices. Not exactly forecasts, more of an assessment of fair prices, based on long-term trends and cost inflation. Below is a basic chart, an excerpt from the report. I would recommend that you read the report, which is linked to below, after the chart and the EDWGGA's press release. I also included download links to the original calculations and a chart, produced from my Grape Data Tool, that shows nominal and inflation-adjusted prices for every price percentile for El Dorado Wine Grapes for the past 26 years.
FOR IMMEDIATE RELEASE
El Dorado Wine Grape Price Recommendations
The El Dorado Wine Grape Growers Association has commissioned grape price recommendations to help buyers and sellers navigate a market landscape characterized by increasing emphasis on premium wines and pressure from rising labor costs. The recommendations indicate average prices that range from $1,300 for Pinot Gris to $2,145 for Grenache Blanc. In addition, for the first time, recommendations are presented for various percentile levels, to provide guidance for different market segments.
“With so many of our members experiencing labor shortages, I wanted our price recommendations to reflect not just long-term trends, but also to account for the spike in production costs,” said Benjamin Falk, President of the El Dorado Wine Grape Growers.
Twenty-five different varieties are covered and recommendations are also given for all other reds and whites, in aggregate ($2,035 and $1,700, respectively). To help buyers and sellers understand how price should vary by quality, minimum, maximum and quartile prices are also provided. So, for example, VFA recommends that 25% of all El Dorado Syrah should sell for over $2,013, while the average price should be $1,765.
“Because El Dorado is a small market with an idiosyncratic varietal mix, typical price discovery activities may not be as reliably successful as we would hope for,” says Gabriel Froymovich, of Vineyard Financial Associates, the firm commissioned with producing the recommendations. “However, long-term price trends have been stable enough that we can produce detailed market guidance to help buyers and sellers maintain reasonable price expectations.”
VFA’s recommendations are based on long-term price growth trends, projected macroeconomic inflation and expectations for the effect that the tightening labor market will have on production costs. The report is available to the public at http://www.eldoradograpes.com.
El Dorado Wine Grape Price Recommendations, 2017
Percentile Price Charts