El Dorado Wine Grape Price Forecast

June 21, 2019

Yesterday, I presented to the El Dorado Wine Grape Growers Association.  I spoke about where we are in the wine market cycle.  I also reviewed my forecast from last year and updated it for next year.  Last year, I shared with the El Dorado growers that I predicted a 2018 Wine Grape Survey weighted average price for all varieties of $1,673.  The actual price was $1,672.  That's an error of $1 or 0.06%.  My second best forecast ever and my best public forecast ever (though my Washington State prediction was almost as good).

 

 

 

I then made a bold prediction.  In the past, USDA Pricing District 10 (Sierra Foothills) and, as far back as I can tell, El Dorado specifically, have not seen prices drop when the market cycle enters periods of oversupply.  My theory for this is that buyers create little opportunity for growers to produce profit and so, cutting prices is impossible.  While I have been predicting that most coastal regions will see price reductions on most varieties, I don't think this is the case with El Dorado.

 

To be clear, I have done little in-depth analysis of this issue, so my confidence that prices will continue to inch upward is relatively low.  But prices shouldn't drop.  The value of El Dorado grapes from competent growers is already very high for buyers.  In any case, based on this theory, my prediction is that the weighted, 2019 average price for all varieties from El Dorado will be $1,714.  Time will tell.

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