California vineyards are increasingly ripped out, troubling sign - Guangzhou BrightVantage Ventures Group Co.,Ltd

Craig Ledbetter of Vino Farms in Lodi has replaced some of his vineyards with pistachio trees.

This winter, Garret Schaefer has been pulling his grapevines out of the ground.

Schaefer’s family has been farming wine grapes in Lodi since 1894. For the past 60 years, the family had a reliable buyer for their 180 acres of grapes, about half of which is Zinfandel. But in 2019, that buyer — a winery — decided to stop making Zinfandel. Since then, Schaefer has tried relentlessly to find another winery to buy the crop.

“At some point you have to say this isn’t working,” Schaefer said. So far, he’s brought in excavators to dig up 40 acres of grapes, and he expects he’ll remove 25 more this year.

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He’s hardly alone. Across California, farmers are ripping out their vineyards en masse. This uprooting is the result of a yearslong oversupply: With wine consumption in the U.S. declining, wineries are decreasing production, which means they need fewer grapes.

Piles of grapevines and mangled metal stakes after being removed.

Caught at the end of that equation are the farmers, who now find themselves with a surplus of fruit. There are simply too many wine grapes planted in California for the market to sustain.

It’s left growers from Mendocino to Madera with an excruciating decision: Do you continue investing in the vineyard, with the risk that there won’t be a buyer for the fruit, or cut your losses?

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“You’re better off to take your loss and not spend that $4,000 an acre to farm your vineyard when you don’t know whether you’ll be able to sell those grapes,” said Craig Ledbetter, owner of Vino Farms in Lodi (San Joaquin County), who has removed 160 acres of vines in the past couple of years.

Some farmers are replacing the grapevines with other crops, like pistachio or almond trees, or even specialty crops like kiwis. Some are renting out their land to solar farms. Many, like Schaefer, are simply letting the land sit fallow.

In the end, Schaefer was able to find a buyer for some of his Zinfandel, but not at a price to comfortably make a profit. His farming expenses have doubled since 2020, he estimated. “I’d love to keep farming grapes; I think I’m pretty good at it,” Schaefer said. “But I can’t. There’s no money in it.”

Pistachio trees can take up to six years to bear a crop, but they’re still more economical than farming wine grapes, according to longtime Lodi grape grower Craig Ledbetter.

In the past six years, California’s wine grape acreage has been reduced by about 18,000 acres, estimated Jeff Bitter, president of Allied Grape Growers, a cooperative that represents 400 growers in California. Yet, that doesn’t go far enough, Bitter believes. In order to reach equilibrium with the market, he said, California needs to remove an additional 50,000 acres, roughly 8% of the state’s bearing wine grape acreage.

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If farmers don’t act on his warning, they’ll inevitably see the value of their land plummet, Bitter said, and many will default on their mortgages: “You’ll just end up with abandoned vineyards.”

The oversupply is a cruel wake-up for the wine industry, which is facing strong headwinds after a long period of unbridled success. For a quarter century, as California’s wine industry boomed, it seemed as if the state couldn’t plant enough vineyards.

“People in this business took it for granted that there was always going to be growth,” Bitter said. Wine consumption skyrocketed in the early 1990s, thanks in large part to the popularization of the so-called French Paradox, which held that red wine was healthy. Consumers demanded more wine, so wineries produced more bottles, so farmers cultivated more grapes. In 1990, the state had about 290,000 bearing acres of wine grapes, according to the U.S. Department of Agriculture; in 2019, it peaked at 590,000.

In the late 2010s, however, Americans started drinking less, creating something of a domino effect with wineries, which wound up with excess bottle inventory, and growers, who suddenly couldn’t find wineries to buy their grapes. The effect has only intensified. “In the last 18 months we’ve seen a precipitous drop-off” in wine sales, Bitter said.

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Bitter has been issuing warnings to the industry since 2019, when he first advised growers to consider removing their vineyards. But it hasn’t been until this year that significant numbers of farmers have heeded his call.

Ledbetter, whose family owns about 3,000 acres of vineyards, mostly in Lodi, replaced the 160 acres he initially removed with pistachio trees. Because it can take up to six years for a pistachio tree to bear a crop, he hasn’t sold any nuts yet. But he says he’s still in a better position than he would be with grapes; pistachios are cheaper to farm and require less capital upfront. Planting a vineyard, even in lower-cost regions like Lodi, can cost up to $30,000 an acre, whereas planting a nut tree orchard is closer to $8,000 an acre.

This year Ledbetter will remove another 140 acres of grapes, “and we’re contemplating another 200,” he said. Some of the land will be fallowed, some rented to a solar farm.

The oversupply is being felt on a global scale: even Bordeaux in France, arguably the world’s most prestigious wine region, is removing about 10% of its vineyard acreage. The French government is subsidizing that effort. No such program exists in the U.S.

Old grapevines that are due to be torn out at Vino Farms in Galt (Sacramento County).

Yet, not every part of California feels these effects equally. Bitter recommended that Napa and Sonoma counties remove only 5,000 acres, as opposed to the 15,000 he prescribed for the Lodi/delta area. Demand for high-end wines from coastal regions remains relatively strong, while growers in places like Lodi, the Sacramento-San Joaquin Delta and the Central Valley, who have historically found great success supplying grapes for lower-priced wines, are competing with ultra-cheap imported bulk wine.

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“With our cost of goods, we can’t compete against Argentina, Chile and even the European countries that produce fruit at a nice price,” Ledbetter said. It’s legal for California wineries to blend up to 25% of this imported bulk wine with California-grown wine, and many industrial-scale producers take advantage of that to cut costs.

Removing a vineyard here is costly — about $2,500 an acre to hire an excavator to pull up the plants, then either grind up the vines and put them back in the ground, or burn the pile of cuttings. (Due to air-quality concerns, burning has become more restricted, which is adding to the cost of vine removal.) That’s still less than it would cost to farm the vineyard for a year, though.

These economics have led many growers to choose to let their land sit empty for now. At least they won’t be losing money.

“About 16% of our acreage is not going to generate any revenue next year,” said Aaron Lange, vice president of vineyard operations for LangeTwins Family Winery and Vineyards in Lodi. Since November, he’s removed 130 of his family’s 1,200 acres, and is about to remove 21 more.

Farmworkers prune young pistachio trees.

Lange doesn’t see much promise in alternative crop options. Some of his acreage will become sheep pasture. Maybe, in a few years, grapes will look like a smart option again, but he wouldn’t cultivate new vines without a guaranteed buyer in place. “No one’s planting on spec,” he said.

Bitter cautioned that vineyard removals shouldn’t be viewed as a tragedy, but simply as an effect of a changing marketplace. “You cannot invest in an asset that you expect to last indefinitely,” he said.

But many farmers can’t help but feel emotional. “These people identify as grape growers, it’s who they are, they’ve been doing it for multiple generations,” said Stuart Spencer, executive director of the Lodi Winegrape Commission. “That is a hard reality check.”

For Schaefer, the Lodi farmer, it’s especially difficult to accept that his oldest Zinfandel vines — planted in the 1960s and registered with the Historic Vineyard Society — simply don’t make financial sense anymore. The old-vine Zin produces beautiful wines, and Schaefer has a sentimental attachment to it, but its yields are meager.

“The old fields are the ones losing the most money,” Schaefer said. “They’re the ones that have to come out first.”

Update: A previous version of this article misstated the number of grapevine acres Garret Schaefer plans to remove this year. The correct number is 25. Also, a previous version misstated the amount of imported wine that can legally be blended into American wines. The correct amount is 25%.

Reach Esther Mobley: [email protected]