2006 GRAPE HARVEST SIGNIFICANTLY SMALLER

Last years huge grape crop will prevent a balance of supply and demand in the near future, no matter how this year’s yield proves to be – and it’s not looking too small although better than 2005. The good news, however, for the wine industry is that the 2005 harvest also generated the largest revenue in decades for California growers.

This year’s grape crop will be at least 16% smaller than the 3.2 million tons of winegrapes produced the previous year, but 2005 along with 2004 and 2003 inventories have left wineries scrambling for tank space for this year’s crop. However, increasing demand for California wine down the road may soon justify new plantings, but only if the contracts provide financial security for growers, says Nat DiBuduo of Allied Grape Growers.

Cabernet Sauvignon is looking slightly larger than average, while Merlot is a “fair size” and Chardonnay, Pinot Noir and Zinfandel are lighter.

Wine shipment growth rates are not doing much better than last year, about 2% for the first quarter. California bottled wine exports faired better than imports, up 6.4% as compared to imports who were down 0.7%, but bulk wine exports were up a whopping 343%, according to Gomberg Fredrikson. Australia certainly isn’t helping matters with its own staggering wine glut.