The last few years have seen more growers in Northern California wrestle with canceled contracts, a decline in grape prices or the worst case scenario….not selling their grapes at all! The question they face; do I cut my losses, take what I can and live to fight another year or….commit even more dollars to this year’s crop and gamble on making my money back on the bulk market?
Sounds like a simple question, but as with anything related to agriculture, there are no guarantees…guaranteed!
For the conservative, the bulk market is definitely not the answer. Spend less in the vineyard, be as efficient as possible, hang a little more fruit and hope that buyers appear at some point before the rains begin. Hopefully they’ll make their farming costs back and maybe next year things will get better.
For the more aggressive, taking matters into their own hands and processing their own fruit to sell as bulk wine is the answer. They believe that wineries will continue to supplement the grapes they process with purchased wine and will be willing to pay for quality once they have a better read on the demand for their brand. They’re betting that the wineries already playing the bulk market will increase the amount of bulk they purchase. All of that, coupled with the increase in new world négociants and custom label business, is the best way to extend the harvest and protect their investment…even if it takes a little more time and money to get it back.
The truth is….no one really knows.
Perhaps the answer lies somewhere in the middle. Sell your grapes for as much as you can and allocate a small percentage of your crop each year to custom crush. Work with a good winemaker and reputable facility and if there’s an uptick on the bulk market for your varietal…you win. If the demand for grapes swings back around…bulk prices usually go up right along with it, so you can win there too.
One thing most growers can all agree on is that the business of selling grapes has changed…and may not be changing back for a while.
NOTE: To learn more about current market conditions check WIN Members: Ciatti Company and Turrentine Brokerage.
