Harvest of Uncertainty

By Karl Klooster

A question mark continues to hover over this year’s winegrowing season in Oregon. The prolonged cool weather, which resulted in late bloom and even later fruit set, has vineyard owners and managers projecting late harvests.

Full ripening for most varieties, they say, won’t occur until mid- to late-October, perhaps even later for certain areas and grape varieties. But that’s not the least of their worries.

Having to wait until mid-October for physiological maturity, particularly in the northwestern part of the state, isn’t that uncommon. Oregon is, after all, a cool-climate region. In comparison to California’s San Joaquin Valley, even its warmest areas are wimpy.

So, if Mother Nature shows some kindness in early fall, things could go well for the 2010 vintage. If not, well, that’s the way the wine ball bounces here, in New York, Washington, Idaho and British Columbia, as well as in much of France, all of Germany, Austria, Switzerland and New Zealand.

Wine sales, on the other hand, are driven by other factors. When money is short, regular consumers may not do without, but they’ll select from the lower end, obviously looking to buy a good wine at a low price.

And, in a down economy, even those who can afford to drink up-market seek out very good wine at a very good price. Everybody loves a bargain. And right now there are plenty of bargains out there.

Unfortunately, that mindset doesn’t help the winegrower or winery owner whose overhead isn’t being met by current cash flow. The fact is that the Oregon wine industry is faced with an excess of inventory. Suffering from bad press, some 2007s remain unsold while others have been sold off in bulk. And the excellent 2008s are moving well only in the mid-price range.

It’s difficult as yet to determine how sluggish market conditions will affect the 2009s. Early drinking whites and light-style reds are just beginning to be released. Their relatively low price points should help sell out, but wineries still face difficult decisions.

The rapidly approaching 2010 harvest will put pressure on wineries to make some difficult decisions about limiting production. Wineries with their own estate vineyards have the option to drop fruit and reduce yield in favor of quality.

But those that rely primarily on purchased fruit may reduce their orders, buying only from vineyards with which they have long-term contracts or where it is important for them to maintain relationships.

As a consequence, a number of growers who lack contracts with wineries are not getting commitments for their grapes this year.

For example, Angie Young of Yamhill Springs Vineyard in the Yamhill-Carlton District AVA said that last year final agreements had been secured for all her fruit by the first week in June. This season, however, she has yet to receive any firm commitments.

“I know many growers out there who are in the same situation we are,” she said. “Wineries are sitting on inventory, sales are down, and everyone seems to be waiting as long as possible to decide which way to go.”

In Young’s case, it has nothing to do with quality. The 15-acre Yamhill Springs Vineyard was planted in 1988, and such noted wineries as Raptor Ridge, Anne Amie, King Estate, Wine by Joe and Duck Pond have snapped up its production in the past.

In fact, the situation is such that the Oregon Wine Board recently coordinated a teleconference with growers and wineries. OWB titled the conference “Evaluating Options in an Oversupply Market.”

A panel of marketing specialists and other industry experts listened to call-in participants and offered advice on alternatives. Potential sales avenues included marketing to Washington and to California, which is experiencing a much cooler-than-normal growing season this year.

Some growers said this was the first time in 20 years that they didn’t have all their grapes sold by this time. Custom crush for growers was put on the table. If vineyard owners were to share risk with wineries it could be a win-win for both.

A broker on the panel suggested making the decision beforehand to market bulk wines as well as finished wines, which would dictate vinification techniques and styles. This approach would save money upfront and allow lower prices while increasing cash flow.

Meantime, the prospect of having to sit around and wait so late in the season for ripening is a little unsettling. On the other hand, low yields of good fruit could increase demand for what is harvested.

“This is going to be a year when we shake the tree to see who hangs on and who doesn’t,” Young said.