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Suisun growers move to adjust state’s crush district lines to accurately reflect wine grape values

For more than  two years,  the the Suisun Valley Vintners and Growers Association (SVVGA)  has been working to put some distance between its wine grapes and those of the eastern Solano County.

 

They have now begun to put their words into action with a formal request to the California Department of Food and Agriculture (CDFA) to change the boundaries. Roger King, Chairman of the SVVGA Growers Committee filed the request on August 26.

 

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As covered extensively by a 2017 article in Wine Industry Insight (WII), vineyards in western Solano County — especially those in Suisun/Green Valley vineyards  — have more in common with the North Coast and Napa County. An Allied Grape Growers analysis  in that WII article  presented data on how prices paid for SVVGA grapes have been suppressed by  the annual  Crush Report’s use of the now-out-of-date boundaries.

 

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Right-click map to view a larger image.

Amendment requested to rectify grape price inequities

“The purpose of this requested amendment in boundary is to remedy bifurcated and regionally disparate District 5 market data, which presents an inequity in annual average price reports within District 5,” said King in a letter to Jeff Cesca, Director of the CDFA’s Division of  Marketing Services

 

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King’s letter emphasized that, “Basic elements of fairness in discovered price averages are at question. Such boundary amendment seeks to re-balance grape market pricing averages to consistency within each separate market region providing better price discovery for both grape producers and processors.  Such price discovery is utilized in grape contracting and reset negotiations and has been found to be utilized by financial institutions developing appraisals.”

Boundary adjustment shrinks Crush District 5, cedes 12,000+ acres to Crush District 17

The adjustment the SVVGA has requested cedes the 11,700-acre Ryer Island along with a substantial portion north of the island.

 

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First Petition in 30+ years to amend California Grape Pricing District Boundary

The SVVGA’s request is the first if its kind in 30 years.

According to King’s letter to the CDFA:

The last such amendment to California Administrative Code Title 3 Chapter 2 Article 1 Section 1700 was dated July 24th, 1985.  It involved District 17 which will also be involved in this amendment request.

The Clare Berryhill Grape Crush Report Act of 1976 set in motion today’s current price discovery reporting system, for achieved grape pricing averages each year across the State of California, now subdivided into 17 Districts.  Price discovery is often used for future grape contracting or contract resets, as well as factors into crop insurance considerations and some financial institution asset valuation.

The grape and wine industry has changed significantly over these decades and the initial Grape Pricing District count of 11 has morphed to 17 as the industry advanced.  That evolution continues with this approach to amend the boundary of District 5 in the Ryer Island region (Sacramento River) of Solano County thus moving the region into District 17 to establish fairness in price discovery for producers and processors.

Supporting Documentation Submitted

A 43-page supporting document with in-depth analysis and more charts is available to  Wine Executive News Premium Subscribers at this  link.

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