More than 30,000 acres worth of vines were sold during 2012, according to a survey of nurseries conducted by Allied Grapegrowers. This figure represents a 50 percent increase over 2011.
Details can be found here in the Allied Grapegrowers January update that just posted.
The wine industry is notorious for boom and bust supply cycles. Is that much planting sound planning or potentially too much?
It depends: The analysis indicates that the industry needs more vineyards to fuel demand but could be in danger of overplanting down the line if it gets carried away, saying:
Based on our projections for 2013-2014, a brake tap may be warranted.
Are we suggesting a halt to planting? Absolutely not. We need 15,000 net new acres per year, assuming wine shipment growth continues on the track it’s been on. Are we suggesting impending oversupply? Absolutely not. Oversupply doesn’t come about by one year of planting a few thousand “extra” acres.
What we are doing is informing the industry that is may be time to check the brakes as we travel down this planting trend hill at a higher and higher rate of speed. Managed growth is the name of the game here. What specifically catches our attention with regard to this planting trend is the amount of institutional and investor money coming into the business, as well as the interest in planting grapes by growers that are diversified farmers and have investment capital as a result of other successful crops, such as almonds. History has taught us, time and time again, to pay attention to these types of behaviors as significant trend indicators.
Let’s not be so blinded by today’s shortage and market opportunities, that we don’t
interpret tomorrow’s production potential accurately.
Allied Grapegrowers president Nat Dibuduo will be discussing the supply situation on Wednesday during the “State of the Industry” session at the Unified Wine & Grape Symposium.