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Friday, October 27, 2006

Grapes & Grains: It's Harvest Season

It can be easy to forget that alcohol is an agricultural product. Barley, grapes, wheat, apples, rye, pears, corn, rice, lemons, potatoes, plums, oranges, seeds, various spices -- you name it and it likely ends up being used in beer, wine or spirits.

Some historians suggest that prehistoric man first decided to stay put so they could plant and harvest crops – not only as a source of food, but also to obtain fermentable raw ingredients. A good growing season then was much the same as it is today. Crops need proper growing conditions. The right amount of rain, sunshine and warm temperatures must all come together before the brewer, distiller or winemaker can work their magic. We are heading towards the end of October, but some farmers are still harvesting the raw ingredients that go into the drinks we enjoy. Reports from around the world suggest beer prices might go up, while the wine glut may continue, further depressing prices.

Foster's Group Chairman Frank Swan at the company's annual meeting told shareholders that dry growing conditions in Australia would boost production costs. He said barley supplies this year in Australia are down about 40 percent. In Germany, reports are that a hot dry summer resulted in the barley crop being off by more than a third. Increases in malt prices also impact whiskey producers.

It’s not just barley price increases facing brewers. The cost of hops has increased and may surge. Part of the reason is that low hop prices for a number of years caused farmers to go out of business or switch to other crops. In the United States, the number of acres planted with hops dropped from 43,430 acres in 1995 to the 28,928 acres in 2006. Estimates are that 70 percent of the hops grown in the U.S. are shipped overseas. A fire at a major hop warehouse in Washington has further tightened supply.

The success of the grape harvest is a much more regional affair. In New York’s Finger Lakes vineyards are reporting a good year, which is welcome relief after two poor harvests. Harsh winters and bad summer growing seasons had cut the supply of grapes by as much as 40 percent and restricted the amount of Riesling and other wines that could be produced in 2004 and 2005.

In Maryland, the state is trying to encourage farmers to plant vineyards through the use of grants. Winemakers in the state currently buy nearly half their grapes from other states. While developing vineyards is expensive, the return on investment over other agricultural land uses is much greater. Maryland is spending $98,000 this year for research, marketing and. Another $150,000 will be available next year. According to the Maryland Wine and Grape Advisory Committee the number of wineries in the state has doubled to 22 since 2002.

In California, the grape harvest in some parts of the state is said to be running behind because of the weather by two to three weeks. Grape quality is said to be good.

European vineyards from Italy to Germany report good results and expect to produce superb wines.

Vineyards in France were starting to talk about another “Vintage of the Century” as the summer progressed, but rains right at harvest time had many vintners saying it would be a “good” year, but likely not great. The interesting thing about French winemakers and others for that matter is that “Vintage of the Century” claims tend to get tossed around fairly liberally. In fact, it makes me wonder if a “Century” in Bordeaux actually lasts only five or six years.

The proof takes a few years to show itself – and by then we may be able to celebrate another “Vintage of the Century.”

1 comment:

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