Friday, April 18, 2008

Anniversary of the 1906 Earthquake

Here we are 102 years after the 1906 San Andreas earthquake which shattered San Francisco.

I hear some of you saying..."so what does that have to do with wine?"


But first- attached are a few stereo-optic photos taken right after the 1906 earthquake: notice how everything is pretty much gone (fires consumed most of the wood the quake spared), how the people are living in the streets, and how the then destroyed Fairmont Hotel was reported to have cost JUST $4,000,000 to construct in the first place! These days you can't even look at a lot the hotel occupies in SF for that much cash.
(Thanks to Stuart for sending these photos in...
Click on the photos to see a bigger version, and look at the center of the photo and cross your eyes slightly...and the photo should
magically pop out at you...)

...and isn't it nice how the Keystone-esque cops are guarding the safes from the banks?...
And still more damage & people living in makeshift shacks and tents, with no water and no sanitation...(please note how the shack has a horseshoe which is placed the wrong way up for luck...)...
Again, how does this tie into wine?
One of the most common questions when I see people tour wineries is "what happens when there's an earthquake?"
t's usually asked as people are shown around barrel rooms - especially rooms which have the barrels stacked high above the tourists heads...and by people from back east, or at least people whom haven't experienced an earthquake or two.

Well, here's a video of what's possible when you take a stack of barrels 6-racks high and place it on a shaker table for a simulated quake. I should note that in my book, wineries really worried about this possibility use 4-barrel racks for stacking as they're much more stable than the 2-barrel variety are in earthquakes...notice how they fail in the front-back (linear) direction and not to the sides (laterally). (I didn't get any sound on the video...)

As you watch the video and look at the photos, think to yourself of how much it would cost to repair the damages from a quake in these current gloomy-economy times...I mean even the smallest mom & pop winery is worth $10~20MIL.
And even the cheapest house in Napa or Sonoma counties is a half-million dollars each....

Inventory losses for winery case goods alone could reach the $500MIL mark, as they're also stacked high and might be damaged in a quake. Tack on all the costs from damaged buildings, losses to equipment and lost time working the wines, as well as possible losses to life, and the place is pretty much a shambles. Transportation chains broken due to injured workers, damaged highways, overpasses and bridges, etc...
In fact, just a few spots of Silverado trail, highways 29, 12/121, and highway 101 being damaged would cripple the ability for National Guard relief to get through.
If there was also damage to the local airports, we'd be pretty much screwed for a week or two.

What is there for you to do to prepare?
Definitely put together an earthquake kit with all the food & water you'll need for 4~7 days, but also slip a few bottles of your favorite wines in as well...after all, you can't be sure when your favorite wine shop will reopen (if ever), and the comfort you'll get from having something as simple as a good bottle of wine will be priceless in a major event like that (you could also barter it for something else, should the need arise!).
[check out the ABAG website for additional preparedness info]

Shat would the total monetary damages be? The final number would vary greatly depending on the type of scenario that plays out, but it could easily be in the billions.
It might even approach the total from, say, a Katrina-type disaster, though the area affected would be much smaller in scope. But still the possible consequences of a strong quake scenario in the North bay area are drastic.

Labels: , , ,

Tuesday, April 08, 2008

Beware rising wine prices

I can't imagine anyone still buying super unleaded these days, much less imagine someone buying 38 gallons of it at the same time.......but here it is: the $159 purchase!
Maybe some kid in his new 4x4 thought he'd get a better burn with that higher octane stuff...
Sure as hell wasn't me, as the only things I've ever driven with a 40 gal tank are tractors and vineyard trucks. But that leads me into the next topic: what's gonna happen when diesel hits $4.20 per gallon?

Be ready for increases in the prices of all goods, but I think you'll see that the vast majority of wineries will hold their prices steady for the short term, as most are already structured with their prices well above their cost of goods. That's not to say they don't feel this impact - they do - but they should be able to hold steady for the short term, barring any higher records for a barrel of crude oil. The exceptions to this will probably be for the truly small Mom & Pop wineries which really just scrape by anyways, and the public traded wine companies which have hungry shareholders wanting to hold onto their dividends if not increase them.
Of course, I've gone on record before as stating that wines don't cost nearly as much to make as wineries want you to believe (see this link about Coffaro winery) and how that plays into the image they then market to consumers, even so, there are many wineries which keep their prices down who will not have that extra padding to absorb the fluctuations in the fuel prices...

The problems for the smaller family wineries is one of "where do we get the money for the fuel increases", and it's likely they'd need to raise prices or sell out (not likely that fuel prices will retreat far enough to get them back out of the red), but they may do OK if they have a higher-end flagship or specialty blend they can market for extra bucks. The problem then becomes one of how much of that specialty blend they can possibly produce, and what the market saturation point is.

On the other hand, most of the really large wine companies are already structured to a position where they can more easily move revenues around to keep up with fuel prices, but will see a higher demand from their investors who want to make up for failing portfolios from other market segments which currently are tanking. Couple that with the continued talk of recession (gasp!) - even by the head of the Federal Reserve, and our gutless President Bu$h who strangely DIDN'T see this as a potential problem only a month ago - and you'll see investors start to harp on their "safe" stocks in large wine companies to get them more scratch.

There will still be people who drink outrageously priced wines, and I hereby donate my allotment of Kristal to the likes of the debutantes whom do so (Britney & Paris, do you hear me?)....
But I think it unlikely that those segments of our industry will see growth in the near future...I think the mid range part of the market will make gains as people who otherwise might take vacations don't, and hedge that the economy is likely to drop further before it gets any better.

Labels: , , , ,

Tuesday, April 01, 2008

March: out like a lion

And here just a few weeks ago I'd jinxed the season by mentioning that it didn't feel like we were likely to get a frost this season.
And then the weather report came out on Saturday night suggesting that we might drop well below freezing on Sunday night...

And so we did....the frost alarm here went off just after midnight.
Not that it woke me up. Frankly, when I know it's coming I can't really fall asleep anyway.
I already had the coffee pot ready to go, and as I was only drowsy I knew it'd only take a quick cup to go with me in the truck to get me fired up. There's a lot of adrenaline that shoots into your system when you have 2" shoots already out on the vines and the temp's dropping below freezing - fast. This really is the danger zone for all growers, a time when everyone needs to be extra cautious to make sure your crop isn't lost to a late frost which kills the buds off. Those shoots in the photo above are really in danger on a night like Sunday's.

I turned on the sprinklers at midnight when it was just dipping past 33°, as I knew that was just the start! The lowest temp I registered was 27 °F @ ~4 AM, and even at sunrise the temp hadn't climbed back out of the danger zone yet...
It wasn't until a little after 9 AM that I turned off the water system, and by that time I had used about a foot of water out of the irrigation pond.

Luckily we've had a decent amount of rain this year (so far...we still need another 7.5" to be at our "normal" level), and the pond has plenty of ammo in it to fight a snap frost here or there.
But my frost protection pond is also my irrigation pond for summer, so I'd rather not see too many of these incidents - not only because it puts the shoots in danger of getting frosted & wilting, but also because it means I don't have as many options when we hit a warm dry snap in the summer or just before harvest. As it is, there's no harm done...this time.
Woe to those whose system fails, whether it is a fan system or irrigation setup, as there's no real way to recover from losing your most productive buds to frost... once the cold air has done its damage, your coming harvest is pretty much shot for the affected vines....

So here we had March, which came in like a lamb with warm temps, heading out like a lion.....albeit a quiet lion, without much in the way of noise (storms), but certainly a dangerous situation for the coming crop.

Labels: , ,