Valley wine grapes in short supply

California's wine grape harvest dropped last year, not the greatest news for consumers who have grown accustomed to bargains.

The crop, much of it processed at Modesto-area wineries, came in at 3.34 million tons, down 7 percent from 2010, the National Agricultural Statistics Service reported Friday.

The tonnage was close to the average for the past five years, but average is not enough at a time when wine demand is growing.

"Supply will remain short for the foreseeable future, keeping prices strong for grapes and bulk wine," said Steve Fredricks, president of Turrentine Brokerage in Novato, in a news release.

Grape prices in the San Joaquin Valley, which have long been far less than Napa and other premium regions, rose markedly last year.

"The crush report shows that we had a significant increase in prices for the interior, from Lodi on down to Bakersfield," Erica Moyer, a Turrentine broker and partner who specializes in the region, said Monday. "Prices are up because demand is up and supply is down."

Ill-timed frost and rain contributed to the reduced tonnage from California last year. It still is by far the nation's top grape producer.

A decade ago, a glut of grapes gave rise to the "extreme value" category of wines at $2 to $3 a bottle. One of the most popular is the Charles Shaw label from Bronco Wine Co. near Ceres, better known as "Two Buck Chuck."

Bargains still can be found at this and other price points, thanks in part to efficient production at E.&J. Gallo Winery of Modesto and other large producers.

And the grape supply could build back up with big crops in 2012 and beyond. Bronco spokesman Harvey Posert said the company is adding vineyards and wine storage capacity in California, and other parts of the world contribute, as well.

"It's traditional agricultural economics," he said. "The market tightens up, and people plant."

The average price statewide reached a record $589 per ton last year. Napa once again was the leader by far at an average of $3,408 per ton.

The average price rose from $360 to $445 per ton in the zone that includes Stanislaus and Merced counties, and the southern part of San Joaquin County. Prices in the Lodi area and Sierra Nevada foothills also rose.

Moyer said coastal wineries have been looking for valley grapes to go into some of their lower-priced wines — and finding the quality to be good.

Nat DiBuduo, president of Allied Grape Growers in Fresno, agreed.

"The wineries went to bed a little hungry last season, and they are actively trying to buy grapes right now in the valley," he said.

The Fresno Bee contributed to this report.

Bee staff writer John Holland can be reached at jholland@modbee.com or (209) 578-2385.

WINE GRAPES, 2011

• The average price per ton was $445 in the reporting district that includes Stanislaus and Merced counties, and the portion of San Joaquin County south of Highway 4. Volume was 291,053 tons.

• The average price was $564 in the zone that includes the premium Lodi area and other vineyards in northern San Joaquin and southern Sacramento counties. Volume was 574,629 tons.

• The average price was $1,143 in the Sierra Nevada foothills. Volume was 17,056 tons. This zone includes a few small vineyards in Tuolumne County but mostly is from Calaveras County north.

Source: National Agricultural Statistics Service