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National growers body urges severe vintage reduction in 2007
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Wine Grape Growers Australia (WGGA), has called on all growers to prune for substantially reduced yields in the 2007 vintage, and for uncontracted growers to seriously consider ‘mothballing’ or hibernating their vineyards for the next season to save their input costs and prevent them from more rapidly reducing their financial resources, as net incomes continue to diminish. The WGGA call comes in the face of no likely improvement in the wine grape market, with the growers’ peak body predicting 2007 as the ‘crunch’ year for many growers, when the spot market for grapes is expected to hit rock bottom.
WGGA Executive Director, Mark McKenzie, said despite the Australian Government’s rejection of any industry-specific support package for the wine grape sector at the recent National Wine Grape Summit, the fundamental message to growers remained the same – that demand for wine grapes and grape prices would only recover once wine stocks can be reduced and wine grape supply is cut to eliminate the large volumes of excess bulk wine currently dragging down the market.
“The Summit confirmed that there is no ‘easy fix’ for the current downturn and although there will not be any industry or Government funded package to pay growers to ‘mothball’ their vineyards this season, any grower who does not have a viable market for their fruit for vintage 2007 should very seriously consider whether to outlay the costs of growing a crop this year, when in all likelihood spot market prices of only $100 to $150 per tonne will be offered – well short of their growing costs. Winemaker delegates to the Summit stated very clearly that they only require a 1.5 million tonne intake in 2007, if the industry is to begin clearing stocks and start getting wine grape supply back into balance. So the message to the whole industry – winemakers and growers — is that grape production must be severely reduced if we are to begin to work our way out of our current oversupply difficulties.”
Mr McKenzie also called on wineries to share the load – by disposing of their lesser quality aging wine stocks out of the wine market, ‘mothballing’ their own vineyards in favour of purchasing grapes from growers, and rewarding contracted growers who agree to significantly reduce their yields.