“It was a bit of a sleeper crop. It just didn’t seem all that big on the vine in the Central Valley.”

That’s the reaction of Brian Clements, vice-president of Turrentine Brokerage, Novato, Calif., to the California Preliminary 2016 Grape Crush Report, which puts the total weight of all grapes crushed at last year’s harvest at nearly 4.2 million tons – an 8.5 percent increase from 2015.

The total includes wine as well as raisin and table-type varieties. The annual report, prepared by the USDA National Agricultural Statistics Service, was released on Feb. 10. It details crush totals as well as average prices by grape variety for each of California’s 17 grape-pricing districts. The 2016 average price of all varieties was $750.27, up 11.7 percent from 2015.

Among the varieties posting increase in crush tonnage, statewide, from 2015 to 2016:

Pinot Noir – 35 percent

Pinot Grigio – 32 percent

Cabernet Sauvignon – 22 percent

Zinfandel – 7 percent

Chardonnay – 6 percent

Merlot – 6 percent

Several years ago, many observers were putting the new production floor for California’s crush at 4 million tons. However, light crops in one region of the state or another had been keeping production below that level.

“Now, it’s probably safe to say that 4 million tons is the new normal minimum crush,” Clements says. “However, because Mother Nature continues to throw curves at us, the total for any one year may vary either side of that.”

Despite increased crush numbers in the North and Central Coast areas, Clements credits new production from recently-expanded acreage of several popular varieties in the San Joaquin Valley with pushing the 2016 crush total above the 4-million-ton mark. “Tonnage of Lodi Cabernet Sauvignon and San Joaquin Valley Pinot Grigio was up quite a bit,” Clements adds.

Still, the added statewide grape production last year wasn’t enough to quench demand for the fruit and the wine made from it.

Sales of California wine priced at $10 a bottle or higher remain very strong and those for less expensive bottles are stable, Clements notes. “Consumers are enjoying California wine across the entire price spectrum.”

What’s more, even with a bigger crop than in 2015, wine grapes from the 2016 harvest sold for higher prices, even reaching record levels in areas of the North Coast.

The average price of all grape varieties rose 11.7 percent from 2015 to just over $750 per ton. The compares to the nearly 14-percent increase in red wine grape prices to an average of a few cents under $900 per ton. The price of white wine grapes averaged $594, almost 10 percent higher than in 2015.

In the Napa Valley, the average price of Napa Valley Cabernet Sauvignon rose 12 percent from 2015 to $6,943 per ton for the 2016 grapes,– setting a record high for the fifth year in a row.

Clements points out that the prices included in the preliminary Crush Report represent both multi-year contract and spot sales. “This doesn’t give you a true picture of the spot market,” Clements says. “As our saying goes, just because you know the price doesn’t mean you know the market. For example, even though the report’s price of nearly $7,000 a ton for Napa Cabernet Sauvignon is the average, you’d be hard-pressed to buy any of those grapes, if available, for much less than that. Prices start at around $6,500 and go up to well above $7,000.”

Currently, about 85 percent of Napa Cabernet Sauvignon grapes are contracted. That helps explain their high market value on the spot market, Clements notes. “There just isn‘t enough supply actually available for sales to meet demand,” he says. “I doubt the supply of 2017 grapes will be enough to meet demand. So, prices for Napa Cabernet Sauvignon are likely to set another record this year.”

In neighboring Sonoma County, the average price for 2016 Cabernet Sauvignon also was up 12 percent from 2015. During that time, the average price rose 6 percent for Merlot and 4 percent for Pinot Noir.

In the Central Coast’s Monterey County, the average price of Chardonnay increased 7 percent from 2015, while that of Pinot Noir increased 5 percent.

In the Valley, average 2016 prices in the Lodi region were up 6 percent for Chardonnay and 3 percent higher for Pinot Noir compared to the previous year.

Most of any impact on supplies of the increased 2016 crush tonnage will likely be limited to the bulk wine market, Clements notes. “It will mean more wine on the bulk market than in the past for Valley wineries,” he says. “So, we’ll probably see a little more movement there.”

The industry will get its first clue as to the potential size of this year’s California wine grape crop and possible direction in grape prices when growers start counting newly-developing clusters this spring.

“If those in the North Coast and certain areas of the Central Coast find two or three clusters per shoot, the market there will probably remain at current levels, Clements says. “But, if they see no more than one or two, that market is likely to turn manic, which wouldn’t be good for the industry.”

In fact, growers and wineries are wondering just how high wine grape prices might climb. “Although there’s no indication of it happening this or even next year, at some point high prices become unsustainable,” Clements says. “Buyers and sellers have to think smart in drawing up contracts that provide long-term profitable prices for both parties, and this is where a reputable brokerage company like ours provides value.”

Meanwhile, California’s wine grape industry remains in high spirits. “There’s a lot of confidence going into the 2017 season,” Clements says. “Consumers are enjoying great wines for reasonable prices across all segments of the market. It’s a good time to be in the wine business. For now, all is well.”