(Wines&Vines) - Allied Grape Growers, the marketing cooperative that represents more than 600 California grapegrowers from Kern County to Lake County, held its annual meeting to Santa Rosa on Thursday for its many members in the North Coast. The co-op members produce some 250,000 tons annually and received nearly $300 million over the past three yeas.

AGG President Nat DiBuduo (pictured to the left) reported on the market and summarized some steps the group is taking to deal with present challenges.

“Last year we sold fruit (for) as low as $150 per ton in the San Joaquin Valley (SJV), up to $6,000 per ton in the North Coast. We are currently in a down cycle in the SJV, but not in the North Coast. Wineries are not buying SJV wine grapes at this time, and if they are talking, it’s not at prices that are sustainable for growers to continue farming wine grapes. But demand for North Coast wine grapes has strengthened in both prices and tonnages needed.”

DiBuduo noted that demand for lower priced wines is declining, while demand and sales of wines $10 and above are increasing. “There is still a large base of consumers drinking wines under $10, but it is definitely getting smaller. In most cases, the SJV is providing grapes for this base, though some of the lower priced wines are being backfilled with imports.”

He also said that some wineries are trying to move programs to higher quality and priced wines. “Hopefully that will create better pricing and demand for some growers.”

Growers planted a few years ago when prices were high—most with but some without contracts. “Today we are seeing contracts expire and not renewed. Wineries are indicating they are still dealing with a backload of bulk wine and plenty of contracted grapes.”

San Joaquin Valley

 In the San Joaquin Valley, old vine Muscat was a hard sell in 2014—even at prices that barely covered harvest costs. New machine-harvested Muscat vines may produce 22 tons per acre, and the old ones 8 tons. Many wineries did not renew their contracts for Grenache and Carignane after the 2014 harvest, he added.

The co-op also didn’t see a strong market and demand this year by processors or wineries for Thompson seedless for concentrate, alcohol or dry white wine. “Look toward the raisin industry as an alternative,” DiBuduo suggested.

Likewise, there is little interest in Ruby Cabernet, Syrah, Barbera and even perennial white blending favorite French Colombard.

As a result, many growers are selling or pulling out their vineyards.

There is interest in Rubired, Pinot Grigio and organic Thompson seedless. In the San Joaquin Valley, these are the only varieties of wine grapes growers are not pulling out.

One important factor is the strong demand for land suitable for nut crops in the San Joaquin Valley. DiBuduo said, “We believe up to 35,000 acres of grapes may be removed in 2015 for this reason, and two-thirds will be wine grapes.”

North Coast Cab is hot

The North Coast counties of Sonoma, Napa, Mendocino and Lake are another matter.

Allied Grape Growers has seen good demand for most wine grapes with strong, fair pricing—even if a few varieties in some areas are challenged.

Cabernet Sauvignon is hot. Pinot Noir in Sonoma was in demand but as of late has been flat.

Pinot Grigio is desirable because there’s not enough supply for the current demand.