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Thursday, August 15, 2013

The coming grape shortage

The U.S. is about to enter a wine grape shortage.

Grape supplies are cyclical--it's economics. When there's a shortage and grape prices are high many people rush to plant more. This was the scene through most of the 1990s. But for more than a dozen years the plantings have dropped dramatically. Not in all areas--one example being coastal plantings of Pinot Noir have gone up sharply in the last ten years. But in many areas it got to be more profitable to plant something else. In the Central Valley of California where most of America's grapes for inexpensive wines come from the economics said to yank out the grapes and put in other crops. You can get a lot more dollars per acre of almonds that you can for grapes in the San Joaquin Valley

Demand is up as more Americans are drinking wine. And with the economy improving it's expected wine sales will continue to grow. This will probably be good news for other countries as they can pick up the slack.

Why do you care? Because supply and demand says grape prices will rise and so will wine prices. This may be especially true of the less expensive American wines.