Grapes

Industry Snapshot

Grape production has consistently constituted one of the largest U.S. noncitrus fruit crops, usually competing with apples for the greatest amount of total fruit produced. In the general fruit category, however, grapes have always trailed oranges. In 2009 the 7.1 million tons of grapes produced in the United States were valued at $3.2 billion. The two types of establishments engaged in the production of grapes in the United States are grape farms and vineyards. Grapes are grown for table use, processed into wine or juice, canned or frozen, and dried for raisins. California, Washington, and New York lead the country in grape production, although California alone produces about 90 percent of the country's grapes. California also leads in wine consumption.

Worldwide, China was the number-one producer of fresh grapes in the early 2010s, followed by Turkey and the European Union. The main source for U.S. imports of fresh grapes was Chile and for grape juice was Argentina.

Organization and Structure

Grape growing is labor intensive. The vines are trained to grow on a system of stakes and wire and are pruned to develop the desired shape for maximum production and quality. Hand pruning continues throughout the year. Other practices used by growers to increase production or quality include thinning of the berries and girdling (cutting away bark and cambium in a ring).

Harvesting is also an arduous task, especially for table grapes, because they require special care to avoid bruising. Because of the higher cost for field labor, mechanical picking is used for grapes intended for wine or raisins.

Background and Development

While European grape varieties account for 90 percent of cultivated grapes in the world, early attempts to grow them in the United States were unsuccessful because of native pests and diseases. As a result, U.S. grape growers began domesticating native species. The Concord grape, an American variety, is a favorite of eastern growers and accounts for 80 percent of the eastern crop. Most eastern grapes are processed into grape juice and wine, while California is the major table grape growing region of the country.

The many diseases and pests that attack grape vines are a continuing threat to the industry. Throughout the late 1980s and early 1990s, the Napa Valley of California was infested with a new strain of root pest. Industry losses as a result of the infestation were estimated to be $600 million.

U.S. exports of grapes to other countries increased at record levels in the 1980s and 1990s. By 2009, 303,000 metric tons of fresh grapes were being exported to 70 different countries. Canada was the number-one market for U.S. grapes, followed by China. Mexico was also an important export market. A saturated domestic market, a willingness of American farmers to grow varieties favored by foreign buyers, adoption of international packaging, and improvements in handling and shipping are credited with the dramatic rise in exports.

The Thompson Seedless variety of grape, created in 1876, has historically been the most popular fresh grape in the United States. The Thompson Seedless is also used for raisin production. Other popular fresh grape varieties are the Red Globe and Emperor. Concord grapes are most often used for grape juice; about 90 percent of the U.S. Concord grape crop goes to making juice.

Throughout the early years of the first decade of the 2000s, California's grape crop continued to grow despite a slowdown in the state's wine industry, which was valued at $33 billion in 2002. Overproduction pushed prices down, which impacted growers throughout the state. Despite efforts by California grape growers to limit production, total U.S. wine grape harvests in 2003 continued to grow.

Overcapacity was also exacerbated by a 28.4 percent increase in U.S. grape imports, which grew to 320.4 million pounds during the 2002-3 marketing season. Leading importers included Chile, Mexico, and South Africa. Wine imports also grew 10.7 percent to 150 million gallons. During this season, while wine exports increased 27.3 percent to 82.3 million gallons, overall grape exports decreased by 7 percent to 530 million pounds, and raisin exports dipped 2.7 percent to 96.2 million pounds.

California's San Joaquin Valley, which produced roughly 40 percent of worldwide raisin crops in 2002, was hit particularly hard by increased imports. Lower labor costs, as well as reduced import tariffs, allowed Australia, Chile, Greece, Iran, South Africa, and Turkey to compete against California raisin growers. At the same time, higher export tariffs made it difficult for U.S. producers to compete internationally. As a result, the raisin industry began to curb production by paying farmers to pull vines or to allow raisins to die on the vines. Industry advocates called for additional intervention by the U.S. government.

Into the first decade of the 2000s, California continued to dominate the industry, while also hosting a thriving vineyard economy and producing many world-famous red and white wines. The more than 700 wineries in California produced over 90 percent of the country's wine. For red wine, the grape varieties zinfandel, cabernet sauvignon, and merlot made up a majority of California's red wine variety grape acreage and a smaller portion of the state's total wine variety grape acreage. For white wine, the grape varieties chardonnay, colombard, and chenin blanc made up 80 percent of the state's white variety grape acreage and 40 percent of California's total wine variety grape acreage.

In the first decade of the 2000s, grapes counted among the most consumed fresh fruits in America, along with bananas, apples, and oranges. Together, these accounted for nearly two-thirds of fruit eaten. Due to increased grape production and imports, per capita consumption of fresh grapes alone grew from 7.6 pounds in 2001 to 8.6 pounds in 2008. Raisin consumption increased slightly to 7.3 pounds in 2002, after several years of fluctuation. Grape juice consumption increased from 3.6 pounds in 2001 to 5 pounds in 2008. Despite recessionary economic conditions, consumption of grapes used to make wine increased to 31.5 pounds in 2003. Prices for fresh-market grapes remained higher than that for processing grapes.

Research and innovation, coupled with encouragement from state governments, transformed grape growing in the United States in the later years of the first decade of the 2000s. Laws encouraged research and promotional activities, new pest controls reduced the amount of chemical control, and new cultivation techniques increased quality. One of the most dreaded grape enemies was phylloxera, an aphid-like insect that attacks susceptible grape rootstock. Private industry and universities began to develop varieties of grapes that offered greater diversity and that had superior pest tolerance and extended growing seasons.

Current Conditions

Although U.S. consumption of fresh grapes grew substantially into the late years of the first decade of the 2000s--reaching 8.6 pounds per person in 2008 as compared to 2.9 pounds in the early 1970s--fresh grapes still represented only about 13 percent of total grapes produced in 2009. About 438,000 tons of grapes were processed into juice, which was also used to make jams, jellies, and other food items.

According to the U.S. Department of Agriculture (USDA), 44,000 tons of grapes produced in 2009 were produced as table grapes and 1.5 million tons were made into raisins. These figures represented a drop in table grape production but an increase in raisin production since earlier in the decade. Prices rose for both categories, with table grapes increasing to $270 per ton. Yield per acre remained fairly steady for all types of grapes at 7.5 tons in 2009. Total acreage planted in grapes, however, declined slightly to 940,700 nationwide. About 84 percent of this land was located in California. Finally, value of production declined somewhat, from $3.4 billion in 2007 to $3.1 billion in 2009.

Industry Leaders

One of the leading grape producers in the early 2010s was the National Grape Cooperative Association Inc. of Westfield, New York, with 1,200 members and annual sales of around $580 million. In 2009 the co-op sold more than 40,000 tons of grapes. Guimarra Vineyards Corp. of Bakersfield, California, had estimated annual sales of $100 million, and privately owned Delicato Vineyards with estimated sales of $80 million. Other top grape producers in terms of acreage in 2010 included Bronco Wine Co., Gallo Vineyards, and Beringer Vineyards.