Foreword

Acknowledgments

Summary

Introduction

Wine grape supply and projections to 2010-11

Wine stocks

Appendices

Zone and region data

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2 Wine grape supply and projections to 2010-11

Wine grape production, 2007-08

In 2007-08, 1.8 million tonnes of grapes were harvested for winemaking, which is an increase of 31 per cent from the 2006-07 harvest of 1.4 million tonnes. The rise in production primarily reflects higher yields, which increased because wine grape growers purchased irrigation water and because seasonal conditions improved in non-irrigated regions. Also contributing to the increase in production was a 1.4 per cent increase in the bearing area of vines, to 166 040 hectares. In 2007-08 the production of red wine grapes increased by 47 per cent to 984 000 tonnes. Production of white wine grapes also increased in 2007-08, by 22 per cent to 853 000 tonnes. The larger increase in production of red wine grapes reflects the greater improvement in seasonal conditions which occurred in cool climate regions and the predominance of red wine grapes in these regions. Average yields were 10 tonnes per hectare for red wine grapes and 12.5 tonnes per hectare for white wine grapes. These yields are close to the average of the past five years. The production of all major wine grape varieties increased in 2007-08 primarily because of higher yields. The main red wine grape variety produced in 2007-08 was shiraz, replacing chardonnay as the highest volume variety produced in Australia. This represents a return to the typical predominance of shiraz, after the unusual predominance of chardonnay in 2006-07. In 2007-08, shiraz production increased by 56 per cent from 2006-07 production, to 442 000 tonnes, closely followed by chardonnay, which increased by 17 per cent to 428 000 tonnes.

Wine grape production, 2008-09

Total wine grape production in 2008-09 is forecast to be 1.6 million tonnes, a decline of 13 per cent relative to 2007-08. Wine grape production is expected to fall in 2008-09 because of lower yields. This reflects the expected effects of ongoing shortages of water for irrigation, hot weather conditions in late January and early February 2009, and bushfires in Victoria. The average yield of wine grapes is forecast to be 9.6 tonnes a hectare and the bearing area of vines is forecast to be 167 500 hectares. In 2008-09 yields of white wine grape varieties are expected to decline by slightly more than those of red wine grapes, reflecting the predominance of white wine grapes in warm climate regions where the effects of hot conditions on wine grape production are estimated to be greatest. The more advanced stage of development of white wine grape varieties compared with red varieties when the high temperatures occurred, is also expected to contribute to the greater decline in the yields of these grapes. However, the effects on yields are largely offset by the increase in the bearing area of white wine grapes, which is expected to occur in 2008-09, as recent plantings reach maturity. Accordingly, production of both red and white wine grape varieties is expected to decline by around 13 per cent in 2008-09. Reflecting lower yields, the production of all major wine grape varieties is expected to decline in 2008-09 relative to 2007-08. Production of shiraz is expected to decline by 13 per cent, chardonnay by 15 per cent, cabernet sauvignon by 13 per cent and semillon by 6 per cent. The bearing area of all these varieties is forecast to increase, by less than 2 per cent in 2008-09 as plantings mature.

Projected wine grape production, 2009-10 and 2010-11

In 2009-10, wine grape production is projected to increase by 14 per cent relative to 2008-09, to 1.8 million tonnes. This forecast is based on the assumption that the availability of water for irrigation will improve somewhat but remain a constraint on production in warm climate regions. The projection also assumes there will not be a repeat of the extremely hot weather conditions experienced in 2008-09. The average yield of wine grapes is forecast to be 10.8 tonnes per hectare in 2009-10, and the bearing area of vines is forecast to be 169 000 hectares. Continuing this trend, wine grape production in 2010-11 is expected to increase by 5 per cent relative to 2009-10, to 1.9 million tonnes. This projection reflects a small increase in the bearing area of vines and an increase in the average yield of grapes to 11.1 tonnes per hectare, as grape growing conditions improve further. Red wine grapes are expected to account for the majority of wine grapes produced in Australia throughout the projection period. This reflects the larger bearing area of red wine grape varieties in Australia, which is sufficient to offset the generally lower yields of red wine grapes. Because of the slightly faster expected growth of white wine grape bearing areas over the projection period, the proportion of red wine grapes is expected to decline slightly over the next three years, from 54 per cent in 2007-08 to 52 per cent in 2010-11. Shiraz is expected to remain the highest-volume wine grape variety produced in Australia throughout the projection period. Chardonnay is expected to be the next largest variety, followed by cabernet sauvignon. Collectively, these three varieties are expected to account for 60 per cent of total Australian wine grape production in 2010-11, similar to the 61 per cent they accounted for in 2007-08. Merlot and semillon are expected to remain the next largest varieties produced in Australia, followed by sauvignon blanc. In the projection period, sauvignon blanc production is expected to increase the most of any major variety, which reflects recent plantings.

2 Estimated and projected wine grape production in Australia, by variety
	estimated production	projected production
	2007-08	2008-09	2009-10	2010-11
	kt	kt	kt	kt
Premium white
Chardonnay	428	363	412	432
Chenin blanc	9	8	9	10
Colombard	59	51	60	66
Muscadelle	1	1	1	1
Pinot gris	26	26	31	29
Riesling	39	34	37	40
Sauvignon blanc	62	55	67	73
Semillon	100	94	103	106
Traminer	12	10	11	11
Verdelho	20	18	20	19
Total	757	660	750	787
Non-premium white
Crouchen	3	2	3	3
Doradillo	1	1	1	1
Palomino	0	0	0	1
Trebbiano	3	3	3	3
Total	7	6	7	7
Premium red
Cabernet franc	4	3	4	4
Cabernet sauvignon	258	225	259	264
Malbec	3	2	3	3
Merlot	125	110	124	125
Petit verdot	24	20	24	22
Pinot noir	44	34	37	40
Ruby cabernet	19	17	19	19
Shiraz	442	384	435	449
Total	919	795	904	927
Non-premium red
Grenache	20	17	20	20
Mataro	8	7	8	8
Total	28	24	28	29
Multipurpose	57	48	59	78
Minor varieties	70	61	71	74
Wine grapes total
Red	984	852	969	992
White	853	742	850	909
Total	1 837	1 594	1 819	1 902

3 Wine grape bearing areas in Australia, selected varieties
	estimated production	projected production
	2007-08	2008-09	2009-10	2010-11
	000ha	000ha	000ha	000ha
Premium white
Chardonnay	31	31	31	31
Colombard	3	3	3	3
Pinot gris	2	2	2	3
Riesling	4	4	4	4
Sauvignon blanc	5	6	6	6
Semillon	6	7	7	7
Total	55	56	57	57
Non-premium white	0.5	0.5	0.5	0.5
Premium red
Cabernet sauvignon	27	27	27	27
Merlot	11	11	11	11
Petit verdot	1	1	1	1
Pinot noir	4	4	4	4
Ruby cabernet	1	1	1	1
Shiraz	43	43	43	44
Total	88	89	89	90
Non-premium red	3	3	3	3
Multipurpose	7	7	7	7
Minor varieties	12	13	13	13
Total	166	168	169	171

4 Specialist wine grape production in Australia, by zone premium and non-premium wine grapes only
	estimated production	projected production
	2007-08	2008-09	2009-10	2010-11
	kt	kt	kt	kt
South Australia
Barossa	86	71	92	93
Mt Lofty Ranges	68	64	61	69
Fleurieu	130	120	121	132
Limestone Coast	131	112	121	126
Lower Murray*	362	294	366	390
Other	1	1	1	1
Total	778	662	763	812 2
New South Wales and ACT
Hunter Valley	28	25	25	25
Big Rivers (excl. Murray-Darling)*	264	261	273	276
Central Ranges	63	52	58	58
Rest of NSW and ACT	21	18	19	19
Greater Victoria
Central	38	27	28	28
North East	25	18	24	24
Port Phillip	30	21	25	25
Rest of Victoria	11	8	10	11
Total	103	74	87	87
Murray Valley*	359	309	367	374
Western Australia	81	72	84	85
Tasmania	11	8	9	9
Queensland	3	4	4	4
Total specialist wine grapes	1 711	1 485	1 689	1 750
* Warm climate zones.

Estimated and projected production, by zone

Wine grapes are grown in all states of Australia and the Australian Capital Territory (ACT). South Australia is the predominant wine grape producing state, accounting for 44 per cent of total production in 2007-08. This section summarises production estimates and projections by zone. Detailed production projections for each zone and variety are given in appendix B. Projections for each geographical indication (GI) region are available from the ABARE website. In 2008-09, wine grape production is forecast to fall in all states and the ACT relative to 2007-08, reflecting lower yields. Production is forecast to decline by the most in South Australia (117 000 tonnes or 15 per cent), followed by the Murray Valley (50 000 tonnes or 14 per cent) and Victoria (30 000 tonnes or 29 per cent). The forecast for Victoria must be considered with caution because little specific information about yields was available for this report because of recent bushfires. In 2009-10, assuming that the availability of water for irrigation improves somewhat and there are no extreme weather events, production in all states and the ACT is expected to increase as yields rise. This trend is expected to continue in 2010-11, when yields are projected to return to historical averages.

Production in cool and warm climate regions

Warm climate regions generally account for around 60 per cent of all wine grapes produced in Australia. Growing conditions in warm climate regions improved in 2007-08, as demonstrated by the 20 per cent increase in yields relative to 2006-07 which occurred in these regions, to 15.2 tonnes per hectare. However, the availability and cost of water for irrigation remained a constraint on wine grape production. As a result, average yields remained below historical levels. In cool climate regions, wine grape growing conditions improved considerably in 2007-08, reflecting relatively higher rainfall, fewer frosts and less effect of bushfire smoke taint compared with 2006-07. The average wine grape yield in cool climate regions increased by 58 per cent, to 7.8 tonnes a hectare, the highest average yield since the record 2003-04 vintage. In 2008-09, wine grape production in cool and warm climate regions is expected to fall by 15 per cent and 12 per cent, respectively. Lower rainfall in south-eastern Australia and high temperatures during the 2008-09 growing season are expected to reduce yields in cool climate regions. High temperatures in 2008-09 are the main reason for the expected decline in production in warm climate regions, because overall, the availability of water for irrigation in these regions remained similar to the previous year. Hot weather conditions in south-eastern Australia in late January and early February 2009 reduced yields in many regions. While there was also a period of high temperatures during the 2007-08 growing season, the effects of high temperatures in 2008-09 are expected to be greater because conditions were more severe and occurred earlier in the growing season, when grapes were at a more vulnerable stage of development. For total grape production, the greatest effect of these high temperatures on grape production is forecast to be in the warm climate regions of the Riverland and the Murray Valley. However, yields in many cool climate regions of south-eastern Australia have also been affected. Bushfires in Victoria during February are estimated to have caused a further reduction in wine grape production in that state. Some vineyards were destroyed, but the largest impact on wine grape production is likely to be caused by bushfire effect, particularly smoke taint, which has reduced the quality of some grapes to the point where they might not be harvested. Because the extent of smoke damage is unknown, the precise magnitude of the effects of the fires on wine grape production in Victoria will not be known until after harvest is completed. In 2009-10 and 2010-11, wine grape production in both cool and warm regions is expected to increase. This projection is based on the assumption that seasonal conditions will improve and accordingly yields in both warm and cool climate regions will recover. However, limited availability of water for irrigation in 2009-10 is expected to delay the recovery in yields in the Riverland and the Murray Valley until 2010-11.