WINE INDUSTRY INSIGHT - EMAIL EDITION #65
FEBRUARY 24, 2009
Please read the important "Letter From The Editor" at the end of this email.
Fed Water Cutoff Could Blunt Obama Stimulus
The U.S. Bureau of Reclamation’s shut off of water to farmers in California’s Central Valley could blunt substantial parts of the Obama stimulus plan by:
- Raising food prices nationwide,
- Significantly increasing the estimated $1.15 billion dollars in California drought losses and,
- Throwing as many as 40,000 more people out of jobs.
The Obama administration said the stimulus would create or save 421,000 in California– some 10 percent of all the total estimate. California has a 9.3 percent unemployment rate, the fourth highest in the nation and the state’s highest in 15 years. California state lost 78,200 jobs in December, the highest in the nation.
FEDERAL WATER TO SHUTOFF MARCH 1
The Bureau of Reclamation announced that it would eliminate all shipments to agriculture for at least three weeks beginning March 1 and for longer depending upon how much rain the state receives until the dry season arrives.
This is the first time that water districts north of the Delta (in the Sacramento Valley) (see map) will receive a 0% water allocation. The southern districts have not been cutoff in this manner in more than 15 years.
STATE WATER CUTBACKS COMPOUND THE SITUATION
The California Department of Water Resources (DWR), said that recipients of water from the state of California would be limited to just 15% of their allocations.
According to the DWR, combined state and federal water cutbacks could idle more than 1 million acres of fields, orchards and vineyards. This, according to the DWR, will cause losses of at least $1.15 billion and cost some 40,000 jobs.
The California Department of Food and Agriculture estimates that in 2008 alone, the drought cost California some $308 million.
FARM BUREAU WEIGHS IN ON NATIONWIDE IMPACTS
According to the Fresno County Farm Bureau, “At a time when everyone across the nation is talking about economic stimulus, it is ironic that we are hit with this huge economic suppressant when Fresno County,and its residents — already plagued with high unemployment — can least afford it.
“The impacts from this year’s water shortages will be far-reaching and widespread – on a social, economic, hydrological, and resource management basis. The west side of the County makes up 25 percent of Fresno County’s $5.3 billion agriculture industry. With a 0% allocation for the west side, farmers are forced to idle large amounts of acreage that would have generated jobs, value-added food products that stimulate significant economic activity for the County and region.”
VALUE-PRICED WINES IN THE CROSSHAIRS
Nat DiBuduo, President CEO of Allied Grape Growers, told Wine industry Insight that, “while over the past decade approximately 150,000 acres of wine grapes were pulled out in the San Joaquin Valley, about 15,000-20,000 acres were planted on the west side of Fresno County.
“This new area was hoped by some of the major wineries to produce 150,000 to 300,000 tons of grapes for wine, concentrate and brandy,” DiBuduo said. “Without the water it will very likely affect production in 2009 to some extent and have an affect on future years as well. This will definitely affect the value-priced wines and those consumers that have enjoyed them.
“The other part of this scenario is if the federal and state water districts cut water to the west side these affected growers may — and probably will – try to get some water out of Friant Dam and the San Joaquin River that normally is sent to growers along the east side of San Joaquin Valley,” DiBuduo continued.
“There is also a plan to restore the flow of the San Joaquin river to reintroduce salmon habitat that will take away more of the available water. The growers on the east side of the San Joaquin Valley will have their production capabilities affected this year as the water shortages become more apparent.”
Posted by lperdue on Feb 22nd, 2009
Don’t Mess With THIS Judge!
Even if you think good law should be chiseled in stone, don’t you dare file it that way in U.S. Bankruptcy Judge Alan Jaroslovsky’s Santa Rosa courtroom.
Jaroslovsky has a reputation as a practical, no-nonsense, often compassionate but instantly-intolerant judge of those who don’t follow the rules.
In the current case of Winery Disposition Group, Orange County attorney Robert P. Goe, (representing Bruce Halvax and others) ran afoul of the court’s rules and right into the honed edge of Jaroslovsky’s rapier wit.
In a show cause order issued Friday, Jaroslovsky wrote (emphasis added):
“It appearing that you have submitted a pleading for filing in the form of paper, animal skin, stone, or other medium instead of electronically, as required by this court, YOU ARE ORDER TO APPEAR before the court on March 6, 2009, at 9:00 a.m. then and there show cause, if any you have, why your pleading should not be stricken and you should not be assessed a monetary fine.”
A LETTER FROM YOUR EDITOR ABOUT A FEW CHANGES AHEAD
When I started Wine Industry Insight, I imagined an occasional article here and there. A bit of digging, some personal input. I needed an outlet to scratch the journalist’s itch I had felt since my first efforts -- Wine Business Monthly and Wine Business Insider – were sold in 1997.
But WII grew like kudzu and, almost overnight, overran all the boundaries I had imagined.
Readership exploded. Emails from interested readers flooded in. Tips, ideas, suggestions and tantalizing stories filled my inbox.
Journalism has turned me on for more than 40 years now. As a result, I can’t let a good story go unwritten any more than I can pull the cork on a great bottle of wine then leave it sitting on the table.
As a result, I’ve been working more than full-time for no pay – an all-too-familiar situation for the owners of small wineries and vineyards. Eventually, however, we learn that no matter how much you love making them, good wine and good journalism both cost money.
PREMIUM DOES NOT MEAN “ALL SUBSCRIPTION”
No, Wine Industry Insight is NOT going to an all-paid-subscription basis.
Most will remain free. However, beginning with the next email issue,a few parts will be premium content.
Of course, “which parts?” is the question that has kept me awake at night. The challenge: keep serving free content to the very large number of readers of the web site and email dispatches while generating financial support to sustain the digging and in-depth reporting. So there you have it: your need for “free” and my need to keep my 1994 Chevy Silverado, three-quarter-ton pickup in gas, parts and repairs.
Unless you can help me with a better idea, the solution I’ve come up with consists of:
1. Making the full text of “Featured Articles” available to subscribers only. Previously published articles in ths category will remain free.
2. Offering subscribers a research and data service (Data Cellar) that will provide the same detailed source documents that I rely upon for my articles.
3. Accepting advertising.
I am open (firstname.lastname@example.org) to any other suggestions you may have.
SUBSCRIPTIONS: DEPRESSION PRICING, RECESSION-FRIENDLY PAYMENTS; LAYOFF GUARANTEE
I know that times are tough, so I’ve created Depression pricing and recession-friendly payments to make things easier.
Subscriptions will be billed to your credit card and cost $5.99 for the first month and $9.99 for each month thereafter until you cancel.
The price is low and the month-to-month membership keeps both your cash flow and financial commitment low.
In addition, if you’re laid off, I’ll give you a free subscription for one year or until the second month of your new job – whichever comes first.
By comparison, when I started Wine Business Insider in 1991, the subscription price was $159 – about $43 more than the $115.88 you’ll pay for your Wine Industry Insight subscription after one year.
Significantly, that $159 in 1991 dollars is worth more than $246 today according to the Consumer Price Index (http://data.bls.gov/cgi-bin/cpicalc.pl).
That’s less than half the price of the original Insider.
WHAT DO YOU GET?
At least 100 email issues per year, any one of which could pay for the subscription many times over.
News delivered on Internet time: relevant, insightful and when it happens. No waiting for an issue date.
What did you do the war, Data?
If you’ve been reading Wine Industry Insight, you know that I dig. I dig deep, hard, wide and far.
What results is a lot of data: court filings, PowerPoint Presentations, Excel spreadsheets, Adobe Acrobat documents and more. These are the raw material I use for my articles.
I don’t use all of the data all of the time. A lot of it, I haven’t used at all.
It just sits there.
My eyes got opened a few weeks ago when I did a custom reorganization and sort on some of the 2008 Crush Report data. I made the Excel spreadsheet available to readers.
And ... What the Hell!? Readers took the .xls file, re-sorted it, drew some more conclusions and sent it back! Great stuff!
That planted the seeds of the Data Cellar. I had been cataloging all these files so I could easily access them for my own use. But now I realize that you can use the data as well ... whether you let me know about it or not.
So, what I am in the process of doing is taking all of those files, entering them into a database and indexing them so they can be searchable. This will take some time because I have a lot, a lot, a lot of data. And, eventually, so will you.
I’m out there digging so you don’t have to.
What’s your time worth? $9.99 per month?
ALSO – please let me know what you don’t know but would like to know. I’ll look for that document and make it a priority to rack in the Data Cellar. Yeah, I know that means other subscribers can find it too. But you didn’t have to get your shovel out.
Yeah, I know we’ll need a different type of shovel if I keep going on like this for too much longer. (What’s that? Say you put on your hip boots and got on the front-end loader 12 paragraphs ago? Harsh!)
WHAT DOES “INSIGHT” MEAN?
Recently, other news outlets told you that:
Also in recent issues, Wine Industry Insight has broken many stories that no one else has covered. Those include:
- Fosters was going to keep its wine business. WII’s digging gave you the resulting winery and vineyard reorganizations in California.
- A major new custom-crush facility was being built in Sonoma County. Only WII described when, where, how big, what the challenges would be and who financed the operation.
- Consumers were changing their wine-buying habits. WII told you what they were buying and shunning, and which wineries were prevailing during the changes.
- That wine sales were dismal. Only WII reported the astonishing jumps in January purchases.
- Slow paying wineries snare growers
- Mobius Painter/Winery Disposition Group saga
- Stevenot Chapter 11
- Conti/Charles B. Mitchell bankruptcy
- Copia reorganization and the legal challenge
INSIGHT, INSCHMIGHT! SO WHAT?
Why should you care?
Solid, timely, insightful news helps you create a better picture of reality on which to make profitable decisions.
- What are consumers buying? Where? What price points?
- What do you do when you find yourself a creditor to a bankrupt business? What can you legally do?
- How to finance winery expansion, vineyard capitalization. Who has the money? What does it take to get it?
- What’s the trend now? When does it change?
- What varietals to plant?
- Which wineries or growers may be financially shaky?
ONE ARTICLE CAN SAVE YOU MANY TIMES YOUR SUBSCRIPTION PRICE
$9.99 per month. $115.88 for the first year.
What you can learn in one article, what you can glean from one Data Cellar document can easily help you make better decisions worth thousands every year.
What you DON’T know CAN hurt you. And what you DO know can make you rich, famous, thin, beautiful, and win you a Nobel Prize. Of course, WII can only give you some of the information you need for that. Some assembly required. Your mileage may vary.
You don't have to do anything right now. The next email edition will offer the next steps.
Thank you for reading this far and for your support.
All My Best,
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