The jet stream moved further south in February, bringing steady rainfall to Coastal California and also some precipitation to Lodi and the Interior. Significant snow fell at higher elevations: State-wide snowpack levels rose from 50% of normal as of January 31st to 104% by March 4th. This spring has started similar to last year’s, although not as wet or as late to the same extent. Also in common with last year, some growers have struggled to get into their vineyards to prune. 

Budbreak is now underway. Temperatures have not dropped low enough for frost to become an issue – in any case, moisture levels have been a defence. The frost risk window will remain open until around the start of May, and some growers may be holding off from pruning until then; others will be assessing whether or not they should prune at all if their vines remain uncontacted. Viticultural climatologist Gregory V. Jones forecasts a continuation of the southerly jet stream through March, making above-average precipitation likely, while other meteorologists are confident California will be free of widespread drought in 2024 and 2025. 

As expected, mid-February’s publication of the California Department of Food & Agriculture’s preliminary 2023 grape crush report failed to stimulate any discernible change on the grape and bulk wine markets. It showed 3.668 million tons of grapes crushed, revised upward slightly to 3.685 million tons in the final report released March 8th, in line with our estimate. We suspect the crop was larger than what crossed the scales – a lot of fruit was left hanging or dumped on the ground – yet the volume that eventually came in was probably still in excess of market need. That said, the bulk market has been more active in recent weeks versus January, with inquiries into – and some transactions on – a range of wines from a range of areas. Requests continue to be mainly for small volumes. 

Some further observations on the crush report: The 8.5% increase in the average tonnage price versus the prior year likely reflects the fact a spot market for 2023 grapes never really developed, so that longstanding contracts – many with annual upticks built into them – skewed the figure. Should current market dynamics persist, more grapes will come out of contract with every year that passes, eventually leading to a downward trend in the average tonnage price. We believe the Central Valley experienced its fifth-consecutive smaller crop, and declining output in the southern Interior is likely to continue as slim margins incentivize pull-outs. Relatively recent plantings of high-efficiency Cabernet and Sauvignon Blanc in Lodi should maintain northern Interior crop sizes for a little while yet. Zinfandel output was significantly down in 2023 – by 26.2% – owing to a high level of rejections and potentially also some pull-outs: That there was no reaction on Zinfandel’s bulk market highlights the lack of demand pressure on that varietal. 

Read on for a detailed assessment of the bulk wine and grape markets and – for the most up-to-the-minute information – get in touch with Ciatti directly. The broker team stands ready to draw on its decades of experience to help navigate buyers and sellers alike through the present challenges, and beyond.

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Bulk Wine Grape Market