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- Excess wine supply in Washington
- Removal of uncontracted acres
- Winter damage in some growing areas
- Mixed Direct-to-Consumer sales
- A large crop in California
- Declining imports
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Executive summary
Industry information for Wine Vineyards in the Pacific Northwest. Updated 3/31/2024
AgWest Farm Credit’s 12-month outlook sees wineries as slightly profitable and vineyards as breakeven.
12-MONTH PROFITABILITY OUTLOOK
INDUSTRY DRIVERS
Profitability
As a whole, wineries should be slightly profitable, and vineyards breakeven over the next year. Both Washington and California are likely to remain oversupplied for multiple years. Some producers with uncontracted production in Washington are removing acres and some vineyards experienced damage over the winter. Direct-to-Consumer sales are mixed, with Oregon and California experiencing declines in sales volumes. Falling import volumes and rising per-bottle values may provide some support to domestic prices.
Industry drivers
Wine grape acres decline in Washington
Some producers with uncontracted production are removing acres in response to an oversupplied market, particularly with cabernet sauvignon. Some growers may replant with varieties that are better aligned with consumer demand, including sauvignon blanc and chardonnay. It can take three to six years for new varietals to come to market, and the long-term impact on prices is not clear.
Cold weather damages vineyards
Cold weather in January damaged some vineyards in Walla Walla, northern Washington and British Columbia; however, the extent is not yet known. Damaged acres could reduce wine grape production in 2024.
Excess wine supply in Washington
While the removal/replanting of vineyard acres and damage from recent weather events could reduce yields and improve the supply and demand balance, Washington is likely to remain oversupplied over the next couple of years. Excess inventories with multiple vintage years remain a challenge.
California’s 2023 crop size increases
California’s 2023 wine grape crop increased 8% from 2022, in part due to production gains in the North Coast, Central Coast and northern interior regions; however, a significant number of tons were not harvested due to weak demand and quality issues. As in Washington, California faces an oversupplied market.
Direct-to-Consumer (DtC) sales mixed
DtC sales values in 2023 were relatively flat across the West Coast; however, declines occurred in terms of volume in both California and Oregon. National DtC sales are increasing in the $60+/bottle categories and falling in lower-priced tiers.
Imports decline in 2023
Wine imports declined from nearly every major trade partner, particularly Chile (down 45% year over year), France (16%) and Italy (13%). While total value declined as well, per-bottle values increased by 7% on average. Reduced import volumes and increased per-bottle values could support domestic prices.
Wine imports by country
Source: U.S. Census Bureau.
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News
Spokane, WA | April 4, 2024
A complex landscape for Northwest agriculture
posted by AgWest Farm Credit
AgWest Farm Credit has released its quarterly Market Snapshot reports covering the state of major agricultural commodities in its northern region of Idaho, Montana, Oregon, Washington and Alaska.
Spokane, WA | January 24, 2024
Challenging conditions for many ag industries in the Northwest
posted by AgWest Farm Credit
AgWest Farm Credit has released its quarterly Market Snapshot reports covering the state of major agricultural commodities in its northern region of Idaho, Montana, Oregon, Washington and Alaska.
Spokane, WA | October 4, 2023
Outlook mixed for ag industries in the Northwest
posted by AgWest Farm Credit
AgWest Farm Credit has released its quarterly Market Snapshot reports covering the state of major agricultural commodities in its northern region of Idaho, Montana, Oregon, Washington and Alaska.
