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Ciatti Analysis of 2021 Preliminary California Grape Crush

PRESS RELEASE

(February 10, 2022, Novato, CA) – The California Department of Food and Agriculture Preliminary Grape
Crush Report for 2021 was released today. This harvest was larger than last year but still below what would
be considered a normal crop. The 3.61 M tons stayed in line with the Ciatti Company’s earlier pre-harvest
projections of 3.65 M tons.

 

The Southern Interior Valley continued to trend downwards in tonnage over the
last 5 years – while Lodi and the Central Coast regions produced larger crops than many expected. The North
Coast bounced back from the very small 2020 harvest but was still well below normal harvest yields. Grape
pricing was up across the board statewide – However it needs to be understood that especially for the Coastal
regions, much of the 2020 pricing had been negotiated post-fires at significant discounts which artificially
brought down the average pricing for that year. The increase in pricing in 2021 reflected strong grape demand
in both the Central Valley and Coastal regions. The increase was due to a shorter crop in each of the last two
years. It should be noted that the overall statewide balance between supply and demand is the result of lighter
crops and not increased demand. The larger crops in Lodi and also in the Central Coast lead us to believe that
pricing in that area has peaked. On the other hand, we could see additional price increases on bulk wine for
some North Coast areas where the grape crops remained below average.

 

Lake and Mendocino tonnages were down in 2021 even when compared to a very light 2020 crop. The other
areas of the North Coast, Napa and Sonoma, were light in terms of an average crop but still larger than the
2020 crop. With the category of $15-$25 per bottle wine sales increasing, we expect to see continued demand
for North Coast grapes. Napa Cabernet Sauvignon grape pricing was up in 2021 and above where we had seen
it in both 2018 and 2019. Grape prices were up significantly in most areas for 2021, but it is important to note
the 2020 prices were artificially low due to contract renegotiations and cancellations with the smoke exposure
concerns. The 2021 prices are up significantly from 2020 prices but up only slightly from the 2019 prices.
These new prices represent a return to normal.

 

In 2021 Monterey delivered its biggest Pinot Noir crop ever and we’re currently seeing an increased amount of
2020 and 2021 Monterey Pinot Noir wine released to the bulk market. With the large Pinot Noir crop numbers,
it’s no surprise that its bulk and grape sales are lagging, while other grape sales activity is very strong.
In the state’s Interior Valley the yields seemed to be much larger in the north end compared to the south. In
District 13 (Fresno, Madera) the crop was down year over year overall by a significant -11.3% with a total
of 1,062,398 tons crushed. This decrease was likely due to lack of water. The two varieties most hurt by the
decrease were two of the most in demand: French Colombard and Muscat.

 

It was the opposite story in District 11 (Lodi) where the crop gained over 100,000 tons from the previous year,
totaling 781,750 tons. Most varieties saw an increase across the board, highlighted by big increases in Cabernet
and Chardonnay. Zinfandel continues to drop in production as a result of more old vines being removed.
District 17 (Clarksburg) crushed over 205,000 tons which represented an increase of 20.8% from previous year.
Clarksburg, dominated by white varieties, saw large increases in Chardonnay and Sauvignon Blanc.
With casegood sales of the $14/bottle and under segment declining, the increase in grape production may create
a slight weakening in bulk wine pricing in the valley.

 

The next big question will be in regards to the 2022 crop. Rainfall continues to be below average with regards
to crop size for the 2022 grape harvest while rainfall has continued to be below average with regards to the
coming crop it is anybody’s guess at this point.

 

Now that we have all the numbers for the 2021 crop we look towards the next harvest in 2022. We know that
the rain season isn’t over, but it’s been below average thus far, and we still have to get through the frost season.
It’s still too early to make any bets on the coming crop season.