The most visible feature is new planting and production throughout the state. California has added to its vineyard land at the rate of about 40,000 acres a year, according to Bedwell. Processing capacity has been tight this year, Turrentine added. That will continue to be an issue as we go forward. Demand for Central Valley grapes may also be dampened because other ingredients used in varietal flavored wines have displaced a certain amount of grapes.
International pressure is another force working against higher winegrape prices.
In Australia s Riverland region, where grape quality is comparable to California s Central Valley, production is increasing and prices have dropped by 20 to 40 percent, according to the Wine Market Report. There s no wine region that is completely isolated from what happens in other parts of the world, whether it s in Chile, Argentina or Bulgaria, Turrentine said. Imports are a factor, but with this type of crop, Bedwell said, we have a real opportunity to export grapes more competitively than before. The most dramatic evidence of the changing market is in Kern County, where some growers are bulldozing vineyards planted to Carignane, Barbera and other grape varieties that are no longer profitable to harvest.