(WSJ) - California's wine industry is getting squeezed by a shortage of grapes. For a decade, grape prices in the nation's dominant wine-producing state were in decline, pressured by big vineyard expansions during the 1990s that flooded the market with product. Faced with price erosion, many farmers in recent years stopped planting new vines, and some even switched to nuts, vegetables and other fruit that fetched higher returns. But Americans kept drinking more wine, and the tables are turning. The cost of Cabernet red grapes has roughly doubled in the past year, and prices for other Golden State varieties, such as Chardonnay and Muscat, also are soaring. That is good news for some growers, but not for many others in the industry.