Californian grape vines are being ripped up as drought forces farmers to switch to higher yielding crops such as almonds and other nut and tree fruits, wine broker Ciatti Co. said.
About 15,000 to 20,000 acres of vines are expected to be pulled out of the ground, the San Rafael-based company wrote in an emailed report. The state has an estimated wine grape acreage of 546,000 acres, according to the California Department of Food and Agriculture.
The state faces at least a third year of drought, with no significant precipitation one-third into the rain and snow season, the broker said. Growing regions in central California are struggling as they face "collapsing" wells and aquifers, with the government reducing initial water allocations for 2014 and no water-delivery solution in sight, Ciatti said.
"The coming year in California will be characterized by drought and sustainability," Ciatti said. "The state is seeing a mass pullout of all low-bearing crops. Farmers have been forced to shift from crop diversification to salvaging crops that will provide them the most long-term sustainability."
California accounted for 88 percent of U.S. wine production in 2012, according to the San Francisco-based Wine Institute. The U.S. retail value of Californian wine was an estimated $22 billion in 2012, out of a total $34.6 billion in wine sold in the U.S.
Land in California with a better outlook for long-term water supplies has increased in value by three to fourfold, Ciatti said.
"The current cyclical drought conditions in the western U.S. will cause industry concerns for future vintages," Ciatti wrote. "This will also spur the continued regulatory and legislative discussions about water restrictions to all California agriculture."