byathread
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Bummer. Perhaps we should start making more long-lived wines (like Amarone) and soon!
http://www.bbc.co.uk/news/world-24746539
http://www.bbc.co.uk/news/world-24746539
World wine shortage
- Thread starter byathread
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KeystoneHomebrew
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The first thing I thought when seeing this yesterday was if some wineries will start fermenting with less skins in their reds and/or less barrel aging. Quicker turnaround, and so many wine drinkers wouldn't know the difference.
Not us of course!
Not us of course!
Arne
Senior Member
Taking a page from the petroleum industry. Wine (pun intended) about a shortage and the price will go up. Arne.
byathread
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KeystoneHombrew: Unfortunately, it looks like less vineyard acreage is the culprit and not winery capacity. Lets start planting grapes! 
Arne: Interestingly, both peak oil and "peak wine" occurred in 2004. Hmmm, I smell a conspiracy!
Arne: Interestingly, both peak oil and "peak wine" occurred in 2004. Hmmm, I smell a conspiracy!
MilesDavis
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At least, unlike gasoline, I can make my own wine at home!
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Wine “Shortage” Is Bull: Here’s Why
October 31, 2013 | Filed under Featured Articles | Posted by Lewis Perdue
The widely touted global wine “shortage” arises from naivety among Citi and Morgan Stanley analysts and their failure to assess the global industry as a whole — especially the agriculture and vineyard aspects (Reality Check: Global Wine Supply & Gullible Brokerage Analysts).
Analysts may also have been fed partial information by their sources as part of a spin campaign to prime the pump for Treasury Wine Estates to dump its U.S. assets — the former Beringer Wine company.
See related articles:
BofA Throws Beringer Under Bus, Urges Treasury To Divest ASAP
BofA/Merrill Lynch’s Love Affair With Treasury Wine Australia
Is there really an impending global wine shortage? (WII Editor Lewis Perdue on Public Radio)
The data points below hit the high points of issues that belie conclusions of a shortage. A detailed look at most of them will reveal additional supporting layers of information.
Data: No Shortage Now … Record Harvests Amid Regional Gluts
Global wine production is rising and likely to continue that trend. These headlines from Tuesday offer some good hints.
World Wine Production Seen at 7-Year High on Spain and Argentina
California Wine Grape Harvest Estimated at 4 Million Tons
Italian vintners look abroad as home sales slump
Italian wine consumption hits record low
What’s more, Argentina, Spain and South Africa are increasing both production and quality.
Add to that a host of new countries that are producing more and better wine: Moldova, Georgia and Croatia are a few.
And then there is the growing wine production from countries and regions benefiting from global warming’s effect on viticulture: England, Canada, India and China, and regions within the U.S and South America. While production in those regions may remain mostly for domestic consumption, that supply diminishes their attractiveness as export targets.
In addition, New Zealand just reported a record harvest (NZ wine exports on rise after record harvest) and Australia is still struggling with how to control its glut.
Chile, France and other EU countries report substantial increases even after reports of frost and storm damage (Bumper Crops Leave Chile Awash With Wine, European Harvest Up 15% Despite Weather).
Consumption An Unreliable Metric – Just As In The 2001 Glut
Beginning in the mid-1990s, as a bogus “shortage” was promoted by brokerage analysts, warnings of looming oversupplies were brushed away by claims that rising consumption would absorb any excess wine. That did not happen and a tsunami of wine flooded the industry.
Today, as in the 1990s, wine consumption is rising globally.
But two traditionally high-consumption wine countries — France and Italy — have seen dramatic drops, substantially due to draconian French and EU NeoProhibitionist campaigns and regulatory sanctions. Similar government anti-alcohol campaigns, tax increases and calls for advertising bans are already gathering support in Australia, The UK, The United States, South Africa and other countries.
The UK minimum alcohol pricing campaign had a devastating effect on beer sales and lower priced wines in 2012. It is unlikely that other countries will escape the effects of these sorts of government alcohol control efforts.
Thus, continued increased consumption cannot be relied upon.
Data: And No Shortage Looming For The Future
The Citi study made a beginner’s mistake in trying to extrapolate the number of acres of vineyards with supply. Dropping acres, the report reasoned, meant dropping production.
However, vineyards — like other agricultural crops — have production elasticities as this headline from October 29 illustrates: World’s Vineyard Shrinks But Production Shows Rise.
Weather obviously affects production as does irrigation, soil type, topography, fertilization and vineyard practices: trellising, canopy pruning, thinning and the number of vines planted per acre. Modern viticulture produces more tons of grapes per acre. So, hidden in the data is the fact that an acre is not an acre is not an acre.
What Did You Do In The Wine Wars, Data?
In addition, the reality behind agricultural statistics rarely reflect what the numbers say. As we have emphasized in the past, (No Winegrape Shortage: Citi Report Based On Bad, Incomplete Data) actual acreages for both producing and newly planted acres are frequently higher than those cited in government statistics. In some countries there are no data available and in others they are even a bigger fiction than those produced by the OIV and the USDA.
And, given the three to five years for a new vineyard to begin producing, data need to account for the number of new acres planted in a given year. Government statistics on the number of newly planted acres are the most notoriously inaccurate. Getting a handle on new acres — to project future production — requires a close relationship with major rootstock nurseries in order to determine how many grapevines have been sold.
Also keep in mind that the number of plants is more important than the number of acres since moves to high-density planting will distort per-acre production figures.
China Data Overlooked
Finally, analysts ignore the fact that China has embarked on a massive planting and production campaign designed to satisfy domestic consumption — especially for low and moderately priced wines which are more easily produced by start-up wineries. In some cases, they have also bought vineyards and wineries — primarily in Australia — more to gain knowledge and experience in the mid-range wines than for supply purposes.
Chinese investors have bought French chateaux for the same reasons at the same time that they are building their own ultra-high-end faux chateaux.
In addition, the latest round of Chinese government sanctions as well as the overall economy in China have hit particularly hard at imports of very high-end French wines which continue to dominate the upper castes of wine.
About Lewis Perdue
Perdue studied physics and biology in college and usually works those into his books. He received his B.S. (1972) with distinction from Cornell University.
He has served on the faculties at UCLA and Cornell University, founded four companies including two technology firms, a wine company and a magazine, and been a top aide to a U.S. Senator and a state governor.
He has also run political races for Congress, worked as a Washington (D.C) correspondent (Ottaway/Dow-Jones, States News Service), a columnist for Gannett, The Wall Street Journal Online, CBS Marketwatch and TheStreet.Com, and a book reviewer for Barron’s.
October 31, 2013 | Filed under Featured Articles | Posted by Lewis Perdue
The widely touted global wine “shortage” arises from naivety among Citi and Morgan Stanley analysts and their failure to assess the global industry as a whole — especially the agriculture and vineyard aspects (Reality Check: Global Wine Supply & Gullible Brokerage Analysts).
Analysts may also have been fed partial information by their sources as part of a spin campaign to prime the pump for Treasury Wine Estates to dump its U.S. assets — the former Beringer Wine company.
See related articles:
BofA Throws Beringer Under Bus, Urges Treasury To Divest ASAP
BofA/Merrill Lynch’s Love Affair With Treasury Wine Australia
Is there really an impending global wine shortage? (WII Editor Lewis Perdue on Public Radio)
The data points below hit the high points of issues that belie conclusions of a shortage. A detailed look at most of them will reveal additional supporting layers of information.
Data: No Shortage Now … Record Harvests Amid Regional Gluts
Global wine production is rising and likely to continue that trend. These headlines from Tuesday offer some good hints.
World Wine Production Seen at 7-Year High on Spain and Argentina
California Wine Grape Harvest Estimated at 4 Million Tons
Italian vintners look abroad as home sales slump
Italian wine consumption hits record low
What’s more, Argentina, Spain and South Africa are increasing both production and quality.
Add to that a host of new countries that are producing more and better wine: Moldova, Georgia and Croatia are a few.
And then there is the growing wine production from countries and regions benefiting from global warming’s effect on viticulture: England, Canada, India and China, and regions within the U.S and South America. While production in those regions may remain mostly for domestic consumption, that supply diminishes their attractiveness as export targets.
In addition, New Zealand just reported a record harvest (NZ wine exports on rise after record harvest) and Australia is still struggling with how to control its glut.
Chile, France and other EU countries report substantial increases even after reports of frost and storm damage (Bumper Crops Leave Chile Awash With Wine, European Harvest Up 15% Despite Weather).
Consumption An Unreliable Metric – Just As In The 2001 Glut
Beginning in the mid-1990s, as a bogus “shortage” was promoted by brokerage analysts, warnings of looming oversupplies were brushed away by claims that rising consumption would absorb any excess wine. That did not happen and a tsunami of wine flooded the industry.
Today, as in the 1990s, wine consumption is rising globally.
But two traditionally high-consumption wine countries — France and Italy — have seen dramatic drops, substantially due to draconian French and EU NeoProhibitionist campaigns and regulatory sanctions. Similar government anti-alcohol campaigns, tax increases and calls for advertising bans are already gathering support in Australia, The UK, The United States, South Africa and other countries.
The UK minimum alcohol pricing campaign had a devastating effect on beer sales and lower priced wines in 2012. It is unlikely that other countries will escape the effects of these sorts of government alcohol control efforts.
Thus, continued increased consumption cannot be relied upon.
Data: And No Shortage Looming For The Future
The Citi study made a beginner’s mistake in trying to extrapolate the number of acres of vineyards with supply. Dropping acres, the report reasoned, meant dropping production.
However, vineyards — like other agricultural crops — have production elasticities as this headline from October 29 illustrates: World’s Vineyard Shrinks But Production Shows Rise.
Weather obviously affects production as does irrigation, soil type, topography, fertilization and vineyard practices: trellising, canopy pruning, thinning and the number of vines planted per acre. Modern viticulture produces more tons of grapes per acre. So, hidden in the data is the fact that an acre is not an acre is not an acre.
What Did You Do In The Wine Wars, Data?
In addition, the reality behind agricultural statistics rarely reflect what the numbers say. As we have emphasized in the past, (No Winegrape Shortage: Citi Report Based On Bad, Incomplete Data) actual acreages for both producing and newly planted acres are frequently higher than those cited in government statistics. In some countries there are no data available and in others they are even a bigger fiction than those produced by the OIV and the USDA.
And, given the three to five years for a new vineyard to begin producing, data need to account for the number of new acres planted in a given year. Government statistics on the number of newly planted acres are the most notoriously inaccurate. Getting a handle on new acres — to project future production — requires a close relationship with major rootstock nurseries in order to determine how many grapevines have been sold.
Also keep in mind that the number of plants is more important than the number of acres since moves to high-density planting will distort per-acre production figures.
China Data Overlooked
Finally, analysts ignore the fact that China has embarked on a massive planting and production campaign designed to satisfy domestic consumption — especially for low and moderately priced wines which are more easily produced by start-up wineries. In some cases, they have also bought vineyards and wineries — primarily in Australia — more to gain knowledge and experience in the mid-range wines than for supply purposes.
Chinese investors have bought French chateaux for the same reasons at the same time that they are building their own ultra-high-end faux chateaux.
In addition, the latest round of Chinese government sanctions as well as the overall economy in China have hit particularly hard at imports of very high-end French wines which continue to dominate the upper castes of wine.
About Lewis Perdue
Perdue studied physics and biology in college and usually works those into his books. He received his B.S. (1972) with distinction from Cornell University.
He has served on the faculties at UCLA and Cornell University, founded four companies including two technology firms, a wine company and a magazine, and been a top aide to a U.S. Senator and a state governor.
He has also run political races for Congress, worked as a Washington (D.C) correspondent (Ottaway/Dow-Jones, States News Service), a columnist for Gannett, The Wall Street Journal Online, CBS Marketwatch and TheStreet.Com, and a book reviewer for Barron’s.
LoneStarLori
Veteran wino, newbie vintner
- Joined
- Aug 6, 2013
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I believe Lewis Perdue.
It's a crock.
It's a crock.
