THE release of the Australian wine industry’s Vintage Report 2016 was a double-edged sword for the SA wine industry.
While SA’s total estimated crush rose 16 per cent, from 798,097 tonnes in 2015 to 926,430t, and grape prices increased, Wine Grape Council of SA executive officer Peter Hackworth said SA farmgate income was still at 2008 levels.
“That’s without adjusting for inflation so we’ve still got a long way to go before wine grape growers, on the whole, are achieving a profitable return,” he said.
While profitable production figures were not estimated this year, Mr Hackworth said they would have been similar to 2015.
Fortunes varied significantly between regions, with cool climate regions the major reason behind the increase in production.
“On a regional basis, we would estimate many growers are just, if at all, covering their costs and a significant number would still be losing money,” Mr Hackworth said.
“For those people growing the right grapes in the right region, who have demand, the outlook is positive.
“If people are still having trouble selling grapes then the outlook for them is pretty much the same. They may still have difficulty selling grapes next year.”
Barossa Shiraz was again the star performer in terms of variety, with its average weighted price reaching $2212 this year, compared to $2137 in 2015 and $1849 in 2014.
“Shiraz is by far our biggest single variety so the demand there is a positive,” Mr Hackworth said.
Regional crush figures showed a 57pc production increase in Langhorne Creek – from 43,348t to 68,090t – a 47pc rise in McLaren Vale and a 24pc jump in the Barossa.
Australia’s total crush rose 6pc, from 1.7mt to 1.81mt, while the average price paid for wine grapes grew by 14pc to $526/t across Australia, the highest average price since 2009.
Fine wines were the big winner, with a significant increase in the amount of fruit sold in the graded categories of more than $1500/t.
Wine Australia chief executive officer Andreas Clark said increased enthusiasm for fine wines internationally was helping support a stronger demand for premium fruit in Australia.
“The positivity for Australian fine wine is resonating within our key export markets and we’ll continue working closely with our grape and wine community to increase the demand and the premium paid for Australian wine,” he said.
SA’s production made up 51pc of the nation’s wine crush, with shiraz, cabernet sauvignon and chardonnay the most common varieties grown.
Mr Hackworth said the WGCSA expected grape prices to increase again in 2017, an encouraging sign for struggling SA growers.
“We’re starting to see inventories fall so that’s an encouraging sign that demand will continue to come into the market,” he said.
“Really for the first time since 2004, people are starting to feel a bit more optimistic.”
Rising water allocations for Riverland growers was another reason for optimism, according to Mr Hackworth, but there were still issues which the industry needed to address.
“The ongoing concern is, as a result of the changing climatic conditions, we’re seeing increasingly compressed vintages,” he said.
“Everything’s ripening much closer together and that’s putting great pressure on wineries to have the capacity to process that fruit because the same amount of fruit is coming in, in a shorter period.”
