(Wines&Vines) - Rabobank released the second (fiscal) quarter Rabobank Wine Quarterly today, containing its outlook for global and regional markets. The report is prepared by the company’s Food and Agriculture advisors under Stephen Rannekleiv.

With headquarters in the Netherlands, Rabobank is a major financer of global agriculture with clients in the United Sates.

The complete report, which outlines trends throughout the world, is available by request from rabotransact.com.

U.S. production

Reflecting recent disclosures, the report summarized that California wine grape production fell by an estimated 10% to 3.9 million tons in 2014, according to the latest California Crush Report.

In spite of the decline in volume, an excess supply exists in California’s San Joaquin Valley, which supplies grapes primarily for lower-priced wines. This is due to shifting consumer preferences for more expensive wines and the large harvests in the previous two years.

Although California is generally planting more grapevines, Allied Grape Growers calculated that 15,000 acres of wine grape vines were removed from the San Joaquin Valley at the end of 2014, and that this trend was expected to continue through spring of 2015.
The report states that the U.S. wine market continued to expand in 2014, though the estimated volume growth of less than 2% was well below the rates seen in previous years.

The value of wines, however, grew at a faster pace than volume, since virtually all the growth came from wine priced at more than $9 per bottle. The report concluded: “With broad availabilities of good-quality domestic supplies, domestic wines outperformed imports in 2014.”

U.S. import trends
Imports are a great concern of U.S. wineries. Fortunately, total import volumes declined 2% for 2014, though the value of imported wine grew 2%.

The dramatic strengthening of the U.S. dollar in the second half of 2014 may boost wine imports in 2015, but the availability and quality of domestic wines will continue to make the market highly competitive and challenging for importers.