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If you need help setting up services or accessing your accounts, please call our Customer Care Team at 866.552.9172 during business hours (7 a.m. — 5 p.m. PST, M-F) or email us at CustomerCare@AgWestFC.com.
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AgWest Farm Credit’s 12-month outlook sees the winery and vineyard industry as slightly profitable.
Drivers include warm weather, excess production capacity in Washington, relatively strong imports and mixed market sentiment.
12-Month Profitability Outlook
Warm weather spurs growth for 2023 crop in Northwest
The Northwest region is catching up on growing degree days following a cool start to the season. Wine grape crops remain behind as much as two weeks depending on the location, but bloom came on quickly and most expect favorable yields. There are reports of some winter damage near Sunnyside and coastal Washington. In Oregon, sentiment is very positive, and some expect the best crop in five years.
Washington growers cautious
While a strong crop year could benefit many growers, wine grape supply and production capacity continue to exceed demand in Washington and a large 2023 crop could lead to lower grape prices. Some wineries are reportedly turning away offers from suppliers. This dynamic may disproportionally impact growers without long-term contracts and who sell into the spot market.
U.S. remains an attractive market to foreign producers
The U.S. is the largest wine market in the world and became the top wine-importing country in 2022, according to the International Organization of Wine and Vine. Despite industry headwinds, margins are relatively strong and attractive to foreign producers. Strong imports will add competitive pressures to domestic wineries if demand does not increase.
Market sentiment mixed
Wine demand is slowly declining in the U.S. and some wineries are forced to raise prices to account for persistently high input costs. Northwest wineries with a loyal customer base and/or strong Direct-to-Consumer sales may experience more resilient demand than those who rely primarily on national retail outlets and/or private label markets.
Northwest vineyards and wineries should be slightly profitable over the next year. Warm weather has helped the 2023 crop to catch up on growth following a cool start to the season. While growers in Oregon anticipate strong demand and prices, those in Washington may face greater competitive pressure if the crop is average or large. A large crop could pressure the supply-demand balance in Washington. Foreign producers continue to view the U.S. as an attractive market and with gradually weakening demand, producers may begin to face greater competitive pressures.
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