Eyeing a possible recession, California wineries cut back on production — and farmers suffer: SF Chronicle

[blarmston]

Unemployment ALWAYS peaks (at lowest) immediately before the turn. It wont be “different this time”.

The market, and to a large extent the economy, has been propped up by Central Bank policies. They “solved” the biggest debt bubble and bust by adding 70% more debt on top of the peak from 11-12 years ago. This 9 inning game is over, and the Fed/ ECB/BOJ/BIS/IMF knows it. The latter two have been discreetly warning of a crash for 6-12 months. And the first two are in full on scramble mode (more negative rates, resumption of asset purchase, Fed cutting rates, etc etc). Only hope is the trade war is resolved, with substance. Not gonna happen. If they announce something, it will be shallow but sold as the Greatest. Its all smoke and mirrors.

If you don’t have a good defense on the field, you better find one.

[Russ_Williams]

Unemployment ALWAYS peaks (at lowest) immediately before the turn. It wont be “different this time”.

The market, and to a large extent the economy, has been propped up by Central Bank policies. They “solved” the biggest debt bubble and bust by adding 70% more debt on top of the peak from 11-12 years ago. This 9 inning game is over, and the Fed/ ECB/BOJ/BIS/IMF knows it. The latter two have been discreetly warning of a crash for 6-12 months. And the first two are in full on scramble mode (more negative rates, resumption of asset purchase, Fed cutting rates, etc etc). Only hope is the trade war is resolved, with substance. Not gonna happen. If they announce something, it will be shallow but sold as the Greatest. Its all smoke and mirrors.

If you don’t have a good defense on the field, you better find one.

So it sounds like you think a global recession is coming and in the next 12-18 months.

[larry_schaffer]

I wonder who much of this is just too many grapes as a result of bountiful crops with the drought conditions softening

Along with over-planting. Lots of new or expanded vineyards planted over the past decade.

All of these are the real issues here. And add on to that a glut of grapes being grown overseas and making it over here and incredibly cheap prices and you understand that there is simply too much supply. Period. And with the increased pressure of a growing craft beer industry, a growing craft cocktail industry, growth in hard sparkling water, growth in alcoholic kambucha, etc etc - it is simply tough out there. And the fact that vineyard now have to compete for labor with other crops like cannabis that pay more does not help. And the fact that vineyards have been slow to embrace mechanical harvesting as has been done in other parts of the world to deal with a tightening labor market and increased labor costs . . .

It’s tough out there, folks - trust me - I am in the midst of it in a very small way

Cheers.

[blarmston]

Unemployment ALWAYS peaks (at lowest) immediately before the turn. It wont be “different this time”.

The market, and to a large extent the economy, has been propped up by Central Bank policies. They “solved” the biggest debt bubble and bust by adding 70% more debt on top of the peak from 11-12 years ago. This 9 inning game is over, and the Fed/ ECB/BOJ/BIS/IMF knows it. The latter two have been discreetly warning of a crash for 6-12 months. And the first two are in full on scramble mode (more negative rates, resumption of asset purchase, Fed cutting rates, etc etc). Only hope is the trade war is resolved, with substance. Not gonna happen. If they announce something, it will be shallow but sold as the Greatest. Its all smoke and mirrors.

If you don’t have a good defense on the field, you better find one.

So it sounds like you think a global recession is coming and in the next 12-18 months.
[/

I think it’s here now.

[blarmston]

Unemployment ALWAYS peaks (at lowest) immediately before the turn. It wont be “different this time”.

The market, and to a large extent the economy, has been propped up by Central Bank policies. They “solved” the biggest debt bubble and bust by adding 70% more debt on top of the peak from 11-12 years ago. This 9 inning game is over, and the Fed/ ECB/BOJ/BIS/IMF knows it. The latter two have been discreetly warning of a crash for 6-12 months. And the first two are in full on scramble mode (more negative rates, resumption of asset purchase, Fed cutting rates, etc etc). Only hope is the trade war is resolved, with substance. Not gonna happen. If they announce something, it will be shallow but sold as the Greatest. Its all smoke and mirrors.

If you don’t have a good defense on the field, you better find one.

So it sounds like you think a global recession is coming and in the next 12-18 months.
[/

I think it’s already here.

[John_Morris]

Reading the story it seems that the low prices have very little to do with a slowing economy and everything to do with a bumper crop. Same thing happens with corn, wheat and cotton from time to time.

As for slowing growth in wine sales (there is no drop), that may be due to the annual price increases of 8-9% (for Cabernet).

[Tom_G_l_a_s_g_o_w]

Reading the story it seems that the low prices have very little to do with a slowing economy and everything to do with a bumper crop. Same thing happens with corn, wheat and cotton from time to time.

As for slowing growth in wine sales (there is no drop), that may be due to the annual price increases of 8-9% (for Cabernet).

Are wine sales quoted in dollars or volume?

[John_Morris]

I was wondering about that, too. In 2017, sales by dollar value rose 3% while volume rose 1%, according to the Wine Institute. Last year, sales were up 3% by both measures, which means the average bottle price remained steady. Of course, this is all California wines, including Two Buck Chuck, not high-end Napa cab.

[BobMilton]

I wonder who much of this is just too many grapes as a result of bountiful crops with the drought conditions softening

Along with over-planting. Lots of new or expanded vineyards planted over the past decade.

All of these are the real issues here. And add on to that a glut of grapes being grown overseas and making it over here and incredibly cheap prices and you understand that there is simply too much supply. Period. And with the increased pressure of a growing craft beer industry, a growing craft cocktail industry, growth in hard sparkling water, growth in alcoholic kambucha, etc etc - it is simply tough out there. And the fact that vineyard now have to compete for labor with other crops like cannabis that pay more does not help. And the fact that vineyards have been slow to embrace mechanical harvesting as has been done in other parts of the world to deal with a tightening labor market and increased labor costs . . .

It’s tough out there, folks - trust me - I am in the midst of it in a very small way

Cheers.

Perhaps you know what came of the UC Davis test of no hands Cabernet done at the Oakville Research Station? I understand that they had a block of Cab that was handled exclusively by machine - trimming, trellising, harvesting, pruning. That sounded interesting to me.

[larry_schaffer]

Bob,

I am not, but lots of these types of ‘studies’ and trials are being done. Machine picking and pruning is now a reality around the world, even in (egads) Bodeaux . . .