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Richard T. Nagaoka Viticultural Consultant St. Helena, CA, in the heart of the Napa Valley _______________________________________________________ |
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| PRESS ARTICLES BY RICH NAGAOKA | ||
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By Rich Nagaoka (full citation to follow) With our thought still on harvest, the phylloxera headlines of the past few years very remote. Did this burn the women, rape the crops? Well, yes and no. True, the 1993 total Napa Valley yield was less than the 1992 yield and the 1994 crop is yet to be weighed. And so far, some pick-outs are as much as 30 percent less than estimated. But that seems more a function of cluster number and weights or our inability to make crop estimates. Some of the vineyards devastated by phylloxera in the late 1980s had been promptly replanted and are back on stream and bearing already. Some vineyards, although infested, did not decline as rapidly as expected and are being aided by such vineyard management techniques as TLC, fertilizer, irrigation and luck. Overall, it’s no exaggeration that phylloxera has significantly, albeit temporarily, changed the dynamics of the local wine industry. It has been estimated that phylloxera has, or ultimately will, stimulate the replanting of about half the valley’s vineyards. As a grape broker, I’ve seen a substantial increase in business. Since new vines take a few years to produce fruit, vintners need to go elsewhere to get their grapes. They can’t put the business on hold while they wait for vines to produce. In fact, some vintners see it as a good chance to test new waters, new varieties. Varieties. It’s a big question for those growers who can afford to replant. During the late 1980s, the choice was simple: either chardonnay or cabernet. Price per ton dictates this choice more than any other single factor. Too bad, because some soils are appropriate for certain varieties and not for others. it has been estimated that a vineyard must gross greater than $7,500-$10,000 per acre to meet pre-harvest, harvest and debt service. If that’s true, then how does a grower find a vintner able or willing to pay for these expenses? The arithmetic is simple: in order to make the nut, either you grow a variety with a high price per ton, or produce with a lot of tons per acre, or both. In 1993, the average Napa Valley ton of chardonnay sold for $1,327, cabernet sauvignon for $1,519 and merlot for $1,546. However, these are averages-last year’s averages. Lows for chardonnay and cabernet were $600 to $800, with a few spot market sales above. The average you see is probably a function of prices paid under long-term contracts with growers, vintner-owned vineyards and one year purchase agreements with growers. What prices will be paid in 1994 and beyond? If Mr. Grower goes to a winery in 1994 looking for a $7,500 per acre gross, he’s likely to be disappointed. And in 1997, when vineyards usually begin bearing fruit, there may be much more fruit available from replanting efforts and the price may not be as high. The serious question to ask is, Are our land prices and costs of production too high? Are our Napa Valley wine prices able to compete with the world supply of high quality wines? This year, chardonnay spot is running $600 to $1,000 per ton, cabernet sauvignon $800 to $1,300 and merlot $1,500 to $1,800. As you can see, only merlot can easily meet the gross survival dipstick, assuming a yield of five to seven tons per acre. Merlot is a hot commodity right now, and the calls for it continue to come in. Almost any prices for any ton. One vintner reportedly has paid $20 per gallon for bulk wine merlot. That translates to about $3,000 to $3,200 per ton after crushing expenses. That’s twice the average price from last year! How long will merlot price and demand continue to prevail? Well, how long are white zinfandel, chardonnay and the French Paradox trends continuing? Even if a grower can afford to plant rootstock in 1994, then bud next year so as to delay the variety decision, will the decision be right or lucrative for the life of the vineyard? These are, as always, the tough decisions for farmer. It’s just as difficult for the producer of annual crops. What’s the price of beans? goes the gratuitous question. For the viticulturist, so much of his investment is tied up in capital expenses: rootstock, trellis, land preparation, equipment, and a 20 to 40 year commitment. As the grower of a perennial plant like a vine, his decisions take on the proportions of family planning: a great community or an unending responsibility? As if the varietal demand picture isn’t difficult enough, what about serious problems of new rootstock (non-AXR) and field selection budwood interactions going on? Some new plantings have been succumbing to a strange phenomenon. During the second year, to as late as the fourth year, the above ground portion has been turning leafroll and dying! U.C. scientists suspect virus such as corky bark and stem pitting. These latent virus disorders have caused up to 70% mortality in certain rootstocks and budwood combinations. That’s not all! Competition form California’s south coast, Sonoma County, France, Spain, Chile, Argentina, Australia, New Zealand, South Africa and Eastern Europe are pounding the wine retail shelves with cheap, cheap prices. The phylloxera infestation has provoked a lot of serious questions, and causes us to re-evaluate the issues of this decade. Out of this challenge is evolving a vineyard revolution in varietal consideration, rootstock and spacing, trellis and cultural practices. Marketing the growers’ crop and vintner’s product has probably never been more competitive. Is this adversity or a learning process? Top | Back to "Press Coverage" Page | Home By Rich Nagaoka (citation to follow) As a winegrapebroker, I’ve seen a substantial increase in business. Since new vines take a few years to produce fruit, vintners were forced to go elsewhere to get their grapes. They can’t put the business on hold while they wait for vines to produce. In fact, some vintners see it as a good chance to test new waters, new varieties. Varieties. It’s a big question for these growers who can afford to replant. During the late 1980s, the choice was simply either Chardonnay or Cabernet. Price per ton appears to dictate this choice more than any other single factor. Too bad, because some soils are appropriate for certain varieties and not for others. it has been estimated that a vineyard must gross greater than $7,500-$10,000 per acre to meet pre-harvest, harvest and debt service. If that’s true, then how does a grower find a vintner able or willing to pay for these expenses? The arithmetic is simple: to make the nut, either you grow a variety with a high price per ton, or produce with a lot of tons per acre, or both. In 1993, the average Napa Valley ton of Chardonnay sold for $1,327, Cabernet Sauvignon for $1,519, and Merlot for $1,546. However, these are averages-1993 averages. Lows for Chardonnay and Cabernet were $600 to $800, with a few spot market sales above. The average you see is probably a function of prices paid under long-term contracts with growers. What prices were paid in 1994? And beyond? If Mr. Grower went to a winery in 1994 looking for a $7,500 per acre gross, he was likely to be disappointed. And in 1997, when vineyards usually begin bearing fruit, there may be much more fruit available from replanting efforts and the price may not be as high. The serious question to ask is: Are our land prices and costs of production too high? Are our Napa Valley wine prices able to compete with the world supply of high quality wines? In 1994, Chardonnay spot was running $600 to $1,000 per ton, Cabernet Sauvignon $800 to 1,300 and Merlot $1,400 to $1,800. As you can see only Merlot can easily meet the gross survival dipstick, assuming a yield of five to seven tons per acre. Merlot is a hot commodity right now, and the calls for it continue to come in. almost any price for any ton. One vintner reportedly has paid $20 per gallon for bulk (wine) Merlot. That translates to about $3,000 to $3,200 per ton after crushing expenses. That’s twice the average price from 1993! How long will Merlot price and demand continue to prevail? Well, how long are white Zinfandel, red Zinfandel, Chardonnay and the French Paradox continuing? Even if a grower could afford to plant rootstock in 1994, then bud this year so as to delay the variety decision, will the decision be right or lucrative for the life of the vineyard? In the last few weeks of the 1994 harvest, new energy to make up shortfalls or meet demand developed. As January of 1995 proceeded, it appeared there was going to be more demand, better prices and long-duration contracts in the making. Is this going to be an early marketing season? What will happen between now and harvest? It is a long nine months until harvest. Should Mr. Grower commit in January, or wait until the eleventh hour for the highest price or demand to fall flat? These are, as always, the tough decisions for farmers. It’s just as difficult as the producer of annual crops. What’s the price of beans? goes the gratuitous question. For the viticulturist, so much of his investment is tied up in capital expenses: rootstock, trellis, land preparation, equipment, and a 20- to 40-year commitment. As the grower of a perennial plant like a vine, his decisions take on the proportions of family planning a great community or an unending responsibility? As if the varietal demand picture isn’t difficult enough, what about serious problems of new rootstock (non-AXR) and field selection budwood interactions going on? Some new plantings have been succumbing to a strange phenomenon. During the second year to as late as the fourth year, the above-ground portion has been turning leafroll red and dying! U.C. students suspect virus such as corky bark and stem pitting. These latent virus disorders have caused up to 70% mortality in certain rootstocks and budwood combinations dictating another replanting. That’s not all! Competition form California’s south coast, Sonoma County, France, Spain, Chile, Argentina, Australia, New Zealand, South Africa and Eastern Europe are pounding the wine retail shelves with cheap, cheap prices and sound, good wines. The phylloxera infestation has provoked a lot of serious questions, and causes us to re-evaluate the issues of this decade. Out of this challenge is evolving a vineyard revolution in varietal consideration, rootstock and spacing, trellis and cultural practices. Marketing the growers’ crop and vintner’s product has probably never been more competitive. Is this adversity or a learning process? Top | Back to "Press Coverage" Page | Home By Rich Nagaoka, Lodi-Woodbridge Winegrape Commission Newsletter (citation to follow) At a Lodi Grape Day luncheon during the mid-1980’s, I heard speaker Lou Gomberg say that having the name Lodi must be an embarrassment, for it is rarely seen on a wine label. Well, how things have changed! Congratulations, Lodi-Woodbridge-Acampo. You’ve come a long way, baby! Just look at the 1995 prices. Cabernet and Merlot is pushing $800 per ton, Chardonnay is within a few hundred dollars of north coast prices. Sure, there are plenty of reasons for the boom; the French wine paradox, the end of the recession, the efforts of vintners like Mondavi, Sebastiani, Glen Ellen and, last but not least, let’s not forget the promotion of the district by the Lodi-Woodbridge Winegrape Commission. The reasons, as they are for all wine booms, are inexplicable and unpredictable except that following a boom will be a decline. Well, enjoy it today, folks. Let me suggest some ways to get more mileage out of your new tires. Consider diversifying and putting your eggs in other baskets. Keep those big checks coming in on time from Modesto and Woodbridge, but take a part of your tonnage portfolio and place them with a vintner who can do something exciting or fun with your grapes. I think the Lodi grower is very much like many Napa Valley growers in the 1950’s to 70’s. In the Napa Valley, during this era, there were only a few vintners buying from a large number of growers who blended their five, fifty or five hundred ton crops with hundreds of others; the wines ended up in 600,000 gallon blends in Modesto or Madera. When the number of wineries grew from 17 to over 200 during the ‘70’s to ‘90’s growers saw their grapes being produced in smaller lots. Vineyard designated wines even became popular. A new identity suddenly developed for the vineyard, grower and vintner. Names like Martha’s Vineyard, produced by Joseph Heitz, had a name and something for a consumer to identify with when he went to the retailer or restaurant. The price paid per ton reflected this identity; Cabernet Sauvignon could be found selling for $200 to $2,000 per ton depending upon its location, location, location. What I’m saying is that the Lodi growers begin to participate in this process. Many vintners are already tasting their grower vineyards separately. How can I play? One of the ways I’ve been able to begin this process is to broker my client’s wine grapes to vintners in Napa or Sonoma counties. The prices, as you can imagine, exceed District 11 averages and these grapes are now identified with prestigious vintners. Having grown up in Lodi on Dad’s vineyard near Ray and Peltier Roads in the fifties and sixties, I’ve seen many changes. Yet some things don’t change. One of the characteristics of the District is its conservative resistance to change. That, of course, makes finding old vine Zin, Carignane, Petite Sirah, and Alicante much more rewarding. Anyone have any of these 100-year-old vineyards seeking stardom? Top | Back to "Press Coverage" Page | Home |
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©1999 by The Grape Doctor, Richard T. Nagaoka,
Viticultural Consultant |
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