Washington State University

Small Farms Team

Oregon wineries awash in grape harvest

John Schmitz, the Capital Press Newspaper, 9-27-02

SALEM, Ore. – The Oregon Wine Advisory Board announced recently that 197 wineries were operating in the state in 2001, up nearly 20 percent from the 166 the year before and more than double the wineries in the state 10 years ago.

Oregon's skyrocketing wine industry has more than a few winery and vineyard owners concerned about whether markets, many of whichhave softened because of the recession, can continue to absorb the increasing production.

They rest their case on the fact that for the first time in several years there are more than a few vineyards that can't sell some or all of their grapes, and that some wineries are lowering prices, especially on premium wines.

On the other hand, other industry players interviewed said there's room for growth and that the current situation is but a blip on long-term production and marketing screens. Oregon State University extension viticulturist Anne Connelly said she's received comments from winegrape growers, wineries and consultants both for and against increased grape plantings.

"I've got this huge array of perspectives," she said. "Some folks say these things go in cycles and that we've had downturns in agriculture before and that they'll come back up."

Erath Vineyards general manager and marketing director Steve Vuylsteke estimated that nearly 5 percent of the Oregon winegrape harvest this season, about 1,000 tons, is still looking for a home.

"The current state of affairs is that the amount of planted and producing acreage has caught up with the demand from wineries," Vuylsteke said. "I believe this will be the first year that I can recall that a lot of grapes won't be picked," Vuylsteke said that until this year Pinot noir growers had little trouble selling their grapes. "This year that's become problematic," he said. "The number of new plantings that have come into production in a relatively short period of time, coupled with a large harvest last year, means that a lot of wineries, including our own, are tight on tank space."

Erath Vineyards, which produces about 35,000 cases of wine year in Dundee, Ore., buys about third of its grapes on the outside. Vuylsteke said that while he wouldn't discourage new grape plantings he cautions new growers to first connect with a winery "before they invest a dime in the industry."

"Just from what we've heard, people are having a difficult time selling it (both grapes and wine)," said Miki Shafer of Shafer Vineyard Cellars near Forest Grove, Ore. "I have calls every single day, every single day, someone trying to peddle their grapes," Shafer said. "From just what we've heard there seems to be a huge supply of grapes on the market."

The Shafers, who were among the first to grow winegrapes and make wine in Oregon's modern wine era, produced 9,000 cases of wine last year. "People who come into the tasting room who have talked to other tasting room people said, 'Gosh, they're having a hard time selling wine,' Shafer said. "I think everybody's having a hard time and not just because of the economy but because there's so damn many grapes." She believes some Oregon wines are "way over-priced," adding that she has no trouble selling medium.- to lower-priced wines.

"We have a Chardonnay that's $3.61 a bottle by the case, and just got a nice write-up in the (Salem) Statesman-Journal that we have the best Chardonnay in Oregon for the price. If you have too much Chardonnay you don't try to get $10 for it," she said. "You're not going to make a lot of money but we did not want it to rot on the vines."

Harry Peterson-Nedry, co-owner and co-winemaker at Chehalem winery near Newberg, Ore., which has more than doubled its wine output the last few years to 14,000 cases today, isn't that concerned about the oversupply of grapes on the market today. He said that there have been several periods in Oregon's relatively young wine industry history when grape supply was greater than winery capacity to handle it.

"This is another instance of excellent vintages prompting people to get into the industry, prompting them to plant. Usually about two to three years (later) you see a blip up in the amount of fruit available," he said. "It takes a year or so for the winery capacity to catch up with the vineyard capacity. "There are a few more grapes that are available now than the last three or four years," Nedry said. 'In the last three vintages there was a severe under-supply. Everybody was scratching to try to find (Pinot noir) grapes and would be offering ridiculous sums."

Nedry said the grape surplus is mostly affecting younger plantings of Pinot noir and old plantings of non-DiJon Chardonnay clones, which have fallen out of favor.

Barbara Ann Bower of Dundee Springs/Perry Bower Vineyards said it's difficult to tell if Oregon wines have reached a saturation level. "Personally, I don't think so. (While) on the one hand it does look like there is more fruit than what vineyards owners can sell to winemakers," she said, "But on the other hand, all of the wineries I have spoken with, they've had record years. We're definitely having a record year here."

Bower said Oregon wines are holding their own for two reasons: many wineries are lowering their prices to become more competitive and the Oregon Wine Advisory Board is "more aggressive" in promoting Oregon wines.

Nedry said that even with the over-supply and soft wine markets, every winery he knows is making as much wine if not more, though they've had to work harder to find markets for it. "I think the Oregon wine industry will always be good, but I think there's going to be some price adjustments," Shafer said.

Connelly said that she gets calls every week from people, many from outside the state, wanting to either grow grapes, make wine or both.

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