Australian vintage 2007: a snapshot
The Australian wine industry has experienced a wild ride
over the 4 vintages from 2004-07. The first 3 vintages resulted in near
identical tonnages of around 1.9 million tonnes. The 2004 vintage was 38%
higher than that of 2003, and the yield was recognised as abnormally high. But
2005 and 2006 both produced similar tonnages with only marginal increases in
vineyard area between 2002-05 (less than 5%).
The consequence was the massive surplus of wine, expressing itself in the proliferation of cleanskins, discount warehouses operating outside the previously established retail system, a continuing decrease in the FOB value per litre of our exports, and almost all the increase in volume coming from bulk exports. (A note of caution: exports of bottled wine did not decline in value per litre, and bulk exports were in part those of big companies electing to bottle and package their cheaper branded wines in the market in which they were to be sold. Not all bulk exports were at giveaway prices to China or similar markets where control of the wine was lost.)
Working on the basis of a 'normal' vintage of around 1.5 million tonnes, and of a continuing but modest increase in the volume of exports, the projections were for a balance between supply and demand in around 2009-10. But long before spring in calendar 2006 (leading up to the 2007 vintage) the signs were ominous. The ongoing severe drought precipitated by a strong El Niño meant dry soils and night skies without cloud cover, all precursors for severe frosts.
Frosts of unprecedented severity, frequency and geographic spread duly impacted. In parts of the Limestone Coast, 3 frosts over a week apart killed successive budbreaks and shoots, with the certainty of a carry-over impact for the 2008 vintage. The drought also caused severe water shortages, with much discussed options for future water use. The official forecast for 2007 came down from 1.9 million to 1.5 million to 1.3 million tonnes.
Even then, nature still had hail and bushfires up its sleeve, and these duly materialised. The Victorian bushfires in the north and east of the state were the worst ever, with 1 million ha razed as the fires burnt for months, often out of control. Smoke taint, which was first experienced in 2003, will severely impact on the quality of the grapes from the important King Valley region, but its effect spread as far south as the Yarra Valley. The grapes picked will form part of the official crop, but it is no certainty the wine made will be of commercial value.
The discovery of phylloxera in one vineyard in the Yarra Valley (with no secondary sites found despite intensive aerial and ground searches) had no impact on harvest figures for the valley, let along those for Australia as a whole. The parallel is precisely that of cancer: early detection and surgery may prove to be decisive, but the chances of its reappearance elsewhere cannot be dismissed. Stringent protocols have been instituted for vineyards within 5 km of the site of the initial outbreak, resulting in an effective quarantine. It may be a problem for the future; for the time being an uneasy calm prevails.
Finally, there is the climate change debate, and the much shorter influences of the waxing and waning of El Niño. There are corresponding longer term and shorter term challenges for the industry. There can be little doubt the industry of 2028 will be very different to that of today. But how? The flip side of challenge is opportunity, and every part of the winegrowing world will face challenges of similar or greater dimension.
Quite apart from the proposition that the southern hemisphere will face lesser increases in temperature than the northern (because of the greater water to land mass ratio in the southern hemisphere, and the reverse for the northern hemisphere), the so-called New World producers of the south have little or none of the regulations (and subsidies) which will make climate-driven change tortuous and slow in most of Europe, faster and more relevant in the New World. Australia has already demonstrated an ability to quickly respond to changes in market demand for differing wine styles and varieties. There is every reason to suppose it will be equally quick to respond to climate change challenges, the yardstick an unemotional cost/benefit analysis.
The one wild card is the extent to which water resources will be available, and at what cost. It is on this issue alone that Chile and Argentina will prove to be more potent competitors than they have so far. The severity of the drought has led to the Prime Minister's announcement that unless there is heavy and continuous rain along the catchment of the Murray Darling River system, there will be no water available for crop irrigation in 2008, which will massively reduce the theoretical tonnage for the 2008 vintage. But it doesn't stop there: even full restoration of the Murray Darling system (which will take years of 'normal' rainfall) will not provide grapegrowers with the amount of water allocations upon which their sector of the industry has been built. More water will be used to fill the inadequate dams, which supply all the east coast cities (including Adelaide); more will be retained for environmental flows; and stock watering will be third in line. By the time a longer term balance has been struck, and the amount available for crop irrigation has been determined, it seems highly likely that some grapegrowers will have had no option but to abandon their vines.
How many 'some' means is anyone's guess. Much will depend on what price sharply reduced yields will achieve per tonne, and this in turn on the uncertain quality of the grapes grown under these new conditions. You have to remember that before the irrigation schemes were put in place at the start of the last (20th) century, the land where vines and fruit trees now (or until recently) flourished was - quite literally - desert.
Having said so much about 2007 (and its future implications) I will depart from my usual region-by-region synopsis. There will be some good wines made from an unprecedentedly early vintage; WA made up for its dismal 2006 red vintage, and those parts of the cooler regions that were not decimated by frost will also make some high-quality wines. Warmer regions, which had access to water and were not affected by bushfires will produce small crops, but the quality will compensate. It's early days, and the bad news has been given. Only good can follow.
The consequence was the massive surplus of wine, expressing itself in the proliferation of cleanskins, discount warehouses operating outside the previously established retail system, a continuing decrease in the FOB value per litre of our exports, and almost all the increase in volume coming from bulk exports. (A note of caution: exports of bottled wine did not decline in value per litre, and bulk exports were in part those of big companies electing to bottle and package their cheaper branded wines in the market in which they were to be sold. Not all bulk exports were at giveaway prices to China or similar markets where control of the wine was lost.)
Working on the basis of a 'normal' vintage of around 1.5 million tonnes, and of a continuing but modest increase in the volume of exports, the projections were for a balance between supply and demand in around 2009-10. But long before spring in calendar 2006 (leading up to the 2007 vintage) the signs were ominous. The ongoing severe drought precipitated by a strong El Niño meant dry soils and night skies without cloud cover, all precursors for severe frosts.
Frosts of unprecedented severity, frequency and geographic spread duly impacted. In parts of the Limestone Coast, 3 frosts over a week apart killed successive budbreaks and shoots, with the certainty of a carry-over impact for the 2008 vintage. The drought also caused severe water shortages, with much discussed options for future water use. The official forecast for 2007 came down from 1.9 million to 1.5 million to 1.3 million tonnes.
Even then, nature still had hail and bushfires up its sleeve, and these duly materialised. The Victorian bushfires in the north and east of the state were the worst ever, with 1 million ha razed as the fires burnt for months, often out of control. Smoke taint, which was first experienced in 2003, will severely impact on the quality of the grapes from the important King Valley region, but its effect spread as far south as the Yarra Valley. The grapes picked will form part of the official crop, but it is no certainty the wine made will be of commercial value.
The discovery of phylloxera in one vineyard in the Yarra Valley (with no secondary sites found despite intensive aerial and ground searches) had no impact on harvest figures for the valley, let along those for Australia as a whole. The parallel is precisely that of cancer: early detection and surgery may prove to be decisive, but the chances of its reappearance elsewhere cannot be dismissed. Stringent protocols have been instituted for vineyards within 5 km of the site of the initial outbreak, resulting in an effective quarantine. It may be a problem for the future; for the time being an uneasy calm prevails.
Finally, there is the climate change debate, and the much shorter influences of the waxing and waning of El Niño. There are corresponding longer term and shorter term challenges for the industry. There can be little doubt the industry of 2028 will be very different to that of today. But how? The flip side of challenge is opportunity, and every part of the winegrowing world will face challenges of similar or greater dimension.
Quite apart from the proposition that the southern hemisphere will face lesser increases in temperature than the northern (because of the greater water to land mass ratio in the southern hemisphere, and the reverse for the northern hemisphere), the so-called New World producers of the south have little or none of the regulations (and subsidies) which will make climate-driven change tortuous and slow in most of Europe, faster and more relevant in the New World. Australia has already demonstrated an ability to quickly respond to changes in market demand for differing wine styles and varieties. There is every reason to suppose it will be equally quick to respond to climate change challenges, the yardstick an unemotional cost/benefit analysis.
The one wild card is the extent to which water resources will be available, and at what cost. It is on this issue alone that Chile and Argentina will prove to be more potent competitors than they have so far. The severity of the drought has led to the Prime Minister's announcement that unless there is heavy and continuous rain along the catchment of the Murray Darling River system, there will be no water available for crop irrigation in 2008, which will massively reduce the theoretical tonnage for the 2008 vintage. But it doesn't stop there: even full restoration of the Murray Darling system (which will take years of 'normal' rainfall) will not provide grapegrowers with the amount of water allocations upon which their sector of the industry has been built. More water will be used to fill the inadequate dams, which supply all the east coast cities (including Adelaide); more will be retained for environmental flows; and stock watering will be third in line. By the time a longer term balance has been struck, and the amount available for crop irrigation has been determined, it seems highly likely that some grapegrowers will have had no option but to abandon their vines.
How many 'some' means is anyone's guess. Much will depend on what price sharply reduced yields will achieve per tonne, and this in turn on the uncertain quality of the grapes grown under these new conditions. You have to remember that before the irrigation schemes were put in place at the start of the last (20th) century, the land where vines and fruit trees now (or until recently) flourished was - quite literally - desert.
Having said so much about 2007 (and its future implications) I will depart from my usual region-by-region synopsis. There will be some good wines made from an unprecedentedly early vintage; WA made up for its dismal 2006 red vintage, and those parts of the cooler regions that were not decimated by frost will also make some high-quality wines. Warmer regions, which had access to water and were not affected by bushfires will produce small crops, but the quality will compensate. It's early days, and the bad news has been given. Only good can follow.
