abare.gov.au - research report 08.05

Wine grape supply 2006-07 and
projections to 2009-10

Wine grape production in 2006-07

Australian wine grape production in 2006-07 is estimated to have been 1.40 million tonnes (table 2), 27 per cent less than the 2005-06 vintage. Widespread drought conditions across much of south-eastern Australia was the major cause of this outcome, as were frosts at crucial times in the growing period and the effects of bushfire smoke taint. Yields in cool climate regions were mostly affected by these factors. Production in warm climate regions was mainly reduced as a result of the lower availability of irrigation water.

Production of premium red wine grapes fell more than that of white wine grapes in 2006-07, reflecting the predominance of red varieties in cool climate regions where production reductions were greatest. As a result, total production of white wine grapes in 2006-07 was greater than the production of red wine grapes for the first time since 1998-99. In total, 723 000 tonnes of white wine grapes and 674 000 tonnes of red wine grapes were produced. The average wine grape yield across Australia was 11.1 tonnes per hectare for white grapes compared with 6.9 tonnes per hectare for red grapes.

The main white wine grape variety produced in 2006-07 was chardonnay, replacing shiraz as the highest volume variety produced in Australia. Approximately 381 000 tonnes of chardonnay were produced in 2006-07. This was the result of a relatively small decrease in production (10 per cent) from the previous season, and a 2 per cent increase in bearing area to 31 900 hectares (table 3). Production of semillon, colombard and riesling declined by approximately 25 per cent from 2005-06, while production of sauvignon blanc decreased by 8 per cent. These reductions resulted primarily from lower yields related to adverse conditions rather than reductions in bearing area.

Despite a 37 per cent decrease in production to 286 000 tonnes, in 2006-07 shiraz remained the most-produced red wine grape variety. Cabernet sauvignon production was reduced by approximately the same percentage to 186 000 tonnes. Production of merlot fell by 27 per cent to 95 000 tonnes. All these reductions were primarily the result of lower yields, as bearing areas remained relatively static or increased slightly in 2006-07 (table 3). Other red varieties such as pinot noir and ruby cabernet also recorded significant declines in production during 2006-07.

In line with yield declines for premium wine grape varieties, the crush of multipurpose grapes for wine production declined by 6 per cent in 2006-07 to 65 000 tonnes (table 2). The bearing area of minor varieties such as viognier and tempranillo continued to rise in 2006-07, up 32 per cent to 4 800 hectares (table 3). Overall, production of these grapes remained a small proportion (3 per cent) of total Australian production.

Wine grape production 2007-08

Total wine grape production in 2007-08 is estimated to reach approximately 1.67 million tonnes, which is an increase of 19 per cent from 2006-07. The recovery is dependent on higher yields, particularly in cool climate regions, following an improvement in seasonal conditions. Continuing drought conditions are again expected to constrain production in warm climate regions. Water allocations have generally been low throughout the 2007-08 growing season; however, water purchases from other regions have helped to mitigate effects on production to some extent.

Production of red grape varieties in 2007-08 is forecast to increase by 31 per cent (table 2) to 884 000 tonnes, mostly because of an improvement in yields, as the forecast bearing area increased minimally (1 per cent). Although the 2008 harvest was still in progress at the time these forecasts were prepared, it seems likely yields will hold up unless there are severe weather conditions in key areas as harvesting draws to a conclusion. Shiraz production is forecast to rise by 35 per cent, cabernet sauvignon by 37 per cent and merlot by 19 per cent relative to outcomes in 2006-07.

Production of white grape varieties is expected to increase in 2007-08, but by less than red grapes, primarily because relatively more of these grapes are grown in warm climate regions. With reduced water availability, a smaller improvement in yields is expected in these areas. Production of chardonnay, the main white wine grape variety, is expected to increase by 8 per cent from 2006-07, while bearing area is expected to increase by 2 per cent to 32 400 hectares. Production of semillon is expected to increase by 15 per cent.

Projected wine grape production in 2008-09 and 2009-10

Wine grape production in 2008-09 is forecast to be 1.78 million tonnes. This projection incorporates an expectation of continuing difficulties in securing enough irrigation water in warm climate production areas. Current storage levels of reservoirs in the major irrigation systems suggest initial water allocations in 2008-09 will be similar to those of 2007-08. For 2008-09, average yield is forecast to be 10.6 tonnes per hectare and bearing area to be 168 000 hectares.

Assuming a return to average seasonal conditions in 2009-10, wine grape production is forecast to reach 2.0 million tonnes. This forecast represents a 43 per cent increase from the drought-reduced crop of 2006-07 and a 20 per cent increase from estimated production in 2007-08. Based on an expected bearing area in 2009-10 of 170 600 hectares, this implies an average yield of 11.7 tonnes per hectare. Production in 2009-10 is projected to be 5 per cent higher than in 2005-06. Yields in 2005-06 averaged 12.3 tonnes per hectare.

In total, production of wine grapes is forecast to increase by 7 per cent from 2007-08 to 2008-09, reflecting the relatively slow recovery from the drought. From 2008-09 to 2009-10, the rate of production growth is projected to increase to 12 per cent, assuming a return to average seasonal conditions.

Over the period 2007-08 to 2009-10, overall production of red wine grapes is expected to be greater than that of white wine grapes. This expectation reflects the larger bearing area of red wine grapes in Australia, notwithstanding the generally lower yields of red wine grape varieties.

Shiraz is expected to regain its place as the highest-production grape variety in 2008-09, replacing chardonnay, which was dominant during the 2006-07 and 2007-08 seasons. The dominance of chardonnay in those years primarily reflects adverse seasonal conditions, which had a disproportionate impact on red wine grape production, as well as the relatively large plantings of chardonnay that occurred in the early part of the decade. Because of these plantings, chardonnay is projected to be the most-produced wine grape variety in Australia in 2009-10.

Estimated and projected production, by zone

Wine grapes are grown in all states and territories of Australia other than the Northern Territory. South Australia is the dominant wine-producing state, accounting for 45 per cent of total production. This section summarises production estimates and projections by zone. Detailed production projections for each zone and variety given in appendix B. Projections for each geographical indication (GI) region are available from the ABARE website, www.abare.gov.au.

Production in 2007-08 is expected to increase in all states and the ACT relative to the 2006-07 vintage. South Australian production is estimated to recover by 28 per cent, which is a larger improvement than for other states. This reflects the predominance of cool climate grapes in South Australia. By contrast, production in the warm climate Murray-Darling – Swan Hill region is estimated to fall 7 per cent from 2006-07 to 2007-08 because of continuing drought conditions.

The ongoing effects of the drought in eastern Australia are again expected to influence wine grape production in 2008-09, particularly in the warm climate regions of New South Wales and Victoria, which are heavily reliant on irrigation water. Significantly above-average system inflows will be required in the short term for irrigation water allocations to return to their historical average, and there is little evidence of this occurring at this stage.

Production in cool and warm climate regions

Under normal seasonal conditions, wine grape production in warm climate regions generally accounts for 60 per cent of total Australian production. In these regions, white wine grape varieties are generally predominant, accounting for 55 per cent of total production on average. In cool climate regions, red grape varieties are predominant, representing 65 per cent of total production.

In 2006-07, cool climate regions generally experienced poorer growing conditions than warm climate regions. In 2007-08 this situation was reversed as seasonal conditions in cool climate regions improved but irrigation water allocations remained low in warm climate regions. Accordingly, in 2007-08, production of red wine grape varieties is expected to exceed that of white varieties, a return to the situation observed in every year since 1999-00 other than 2006-07.

Further illustrating the reversal of fortunes for cool versus warm regions in 2007-08, production of red wine grape varieties is estimated to rebound by 61 per cent in cool climate regions and 8 per cent in warm climate regions. Reflecting the smaller extent to which white wine grapes were affected in 2006-07, the estimated increases in production of white wine grape varieties are smaller, with production up 41 per cent in cool climate regions. With continued drought conditions, white wine grape production is estimated to be 3 per cent lower in warm climate regions in 2007-08.

Of the projected record 2 million tonnes of wine grape production in 2009-10, around 1.2 million tonnes is estimated to be from warm climate regions, and 0.8 million tonnes from cool climate regions.

2	Estimated and projected wine grape production in Australia, by variety

estimated production

projected production

2006-07

2007-08

2008-09

2009-10

Premium White

Chardonnay

381

413

419

477

Chenin Blanc

Colombard

Muscadelle

Pinot Gris

Riesling

Sauvignon Blanc

Semillon

103

Traminer

Verdelho

Total

633

698

720

833

Non premium White

Crouchen

Doradillo

Palomino

Trebbiano

Total

Premium Red

Cabernet Franc

Cabernet Sauvignon

186

255

274

286

Malbec

Merlot

114

125

138

Petit Verdot

Pinot Noir

Ruby Cabernet

Shiraz

286

388

434

467

Total

631

832

912

976

Non premium red

Grenache

Mataro

Total

Mulitpurpose

Minor Varieties

Wine Grapes Total

Red

674

884

967

1 040

White

723

784

811

958

Total

1 397

1 668

1 780

1 998

3	Wine grape bearing areas in Australia, selected varieties

estimated

projected

2006-07

2007-08

2008-09

2009-10

000ha

Premium white

Chardonnay

Colombard

Pinot Gris

Riesling

Sauvignon Blanc

Semillon

Total

Non premium white

0.5

Premium red

Cabernet Sauvignon

Merlot

Petit Verdot

Pinot Noir

Ruby Cabernet

Shiraz

Total

Non premium red

Multipurpose

Minor Varieties

Total

163

165

168

171

4	Specialist wine grape production in Australia by zone

estimated

projected

2006-07

2007-08

2008-09

2009-10

South Australia

Barossa a

Mount Lofty Ranges a

Fleurieu a

117

134

131

Limestone Coast a

155

175

180

Lower Murray

302

310

336

391

Other

Total

574

740

808

867

New South Wales and ACT

Hunter Valley a

Big Rivers (excl. Murray Darling)

216

252

284

304

Central Ranges a

Rest of NSW and ACT a

Total

288

362

391

413

Greater Victoria

Central a

North East a

Port Phillip a

Rest of Victoria a

Total

Murray Darling - Swan Hill

315

294

299

395

Western Australia a

Tasmania a

Queensland a

Total specialist wine grapes

1 293

1 563

1 667

1 848

a Cool climate region.