MOTHBALLING or removing vineyards altogether are among drastic options being considered by “under siege” Riverland growers faced with a crippling oversupply of wine grapes.
An unprecedented lack of storage space means wineries are unlikely to accept even an average-sized 2023 vintage crop, adding to the alarming prospect of already-falling demand, plummeting prices and rising input costs, such as fertiliser.
The Murray Pioneer understands at least one winery has suggested radical measures for Riverland growers of certain red-wine varieties, including converting to white-wine varieties and/or taking vines out of commercial production for 2023.
In recent days local grower group Riverland Wine addressed a dire forecast – made at a conference in Adelaide – about th lack of storage space, telling its members that any grapes produced without a contract were unlikely to be sold in the 2023 vintage.
“If they can be sold, the sale price will certainly be well below the cost of production,” Riverland Wine warned.
“Growing fruit without having a secure point of sale at a reasonable price will most likely incur a loss – the question is how much of a loss.”
- Riverland Wine described the value of vine and wine grapes as being “under siege”, attributing the nightmare scenario to a number of factors, including:
- 2021’s bumper crop skewing the supply-demand balance.
- Sudden loss of the China export market.
- Cost and availability of containers and freight creating supply chain issues.
“The freight cost of sending a container of wine to traditional markets was approximately $0.08 (to) $0.12 per litre several years ago,” Riverland Wine said.
“It is now around $0.60 per litre.”
Riverland Wine said some of its growers were considering taking patches out of production, and restricting water and inputs to avoid cropping, either temporarily – known as mothballing – or permanently.
It said those considering the second scenario could remove current vineyards and replant “with different varieties if or when the situation improves”.
Mirroring the message from the major winery, it also said redevelopment to “more viable varieties” was a consideration.
The Pioneer understands early signals point to a significant drop in prices paid to growers for the 2023 vintage. The Pioneer also understands that meetings between growers and a local winery will continue in the coming days and weeks, as both look to put preliminary measures in place ahead of a worst-case scenario for the 2023 vintage.
Meanwhile SA Primary Ind-ustries Minister Clare Scriven said the change of federal government – which has seen South Australian Senator Penny Wong installed as Foreign Affairs Minister – offered a glimmer of hope to local growers devastated by China’s severing of trade ties.
“I’m cautiously optimistic,” Ms Scriven said.
“There’s a new government, and already the Prime Minister, as well as other ministers, have been trying to mend some of those bridges.
“We need to be aware of the opportunities there are, and work constructively as much as possible.”