The California grape surplus and the price-cutting it generated is abating in most regions of the state, according to research out yesterday.

The wine industry analyst MKF Research, which yesterday released its report, Grape Trends 2005, however, still reported a slightly mixed picture.

MKF partner Mike Fisher said: "The North Coast has remained protected from the significant price-cutting that most other regions have been suffering since 2001 or earlier - in contrast to the Central Coast, which continues to experience considerable price declines. The Central Coast's record 2004 harvest, surpassing the North Coast by over 50,000 tons, has delayed their price recovery."

Although the Central Valley faced the most severe price-cutting over the last several years, the area is now enjoying price recovery as grape tonnage in the region has continued to fall.

Among varietals, Pinot Noir production is increasing dramatically in both Sonoma and the Central Coast.

Central Coast prices were still pressured by its record harvest, however.
Since 2000 the Central Coast's average price per ton has declined by 20%, to US$963 from its peak of US$1,208. Pricing pressure was exacerbated by the 2004 harvest, its largest in history, weighing in at 419,000 tons. While production has increased for all major varietals, Syrah production grew most rapidly, up 78% since 2000. Pinot Noir production has increased by 50%, compared with a growth of 10% statewide.

The Central Valley's average price per ton rose for the first time since 1999, to US$467 per ton. Price pressures came earliest to the Central Valley, beginning in 1999, and were the most difficult. From 1999 to 2004, Central Valley grape prices declined by an average of 23%. Meanwhile, Central Valley tonnage has decreased by over 500,000 tons from its peak of 2.53m in 2000.

Since 2001, the North Coast's average price per ton has decreased by only 10%, to US$1,662 from its peak of US$1,844 per ton in 2001. Yields continue to decline in the region. While acreage increased by 25,000, total tonnage remained flat at its 2000 peak of 405,000 tons.

The Bordeaux varieties represented 57% of Napa's crush, lead by Cabernet Sauvignon. Cabernet's price per ton declined by 1.5% from 2003 to US$3,952 in 2004. However, Napa Cabernet's average price per ton in 1997 was only US$2,018.

Chardonnay, Sonoma's major wine grape, represented 32% of the region's 2004 harvest. Prices for Sonoma Chardonnay reversed several years of annual declines with a small increase in 2004. Pinot Noir tonnage has more than doubled since 1998.