For the first time in three decades, Lisa Graul hasn’t been able to sell her coveted Cabernet Sauvignon grapes, which she farms with her husband at their home in Calistoga. Her existing contracts with wineries expired this year and weren’t renewed, so she has slashed her pricing in a desperate attempt to lure in some buyers before harvest’s end — from her typical $9,500 per ton to $2,500. 

“Even that is negotiable,” she said. “We just want to make our expenses back at this point.”

Graul isn’t alone. Grape growers across California who can’t find wineries to buy their fruit are offering unprecedented discounts, as they’re running out of time to make a profit on this year’s crop, or at the very least, cover their farming costs.

The issue isn’t the quality of the grapes. The 2024 growing season was steady and mostly void of problematic weather-related events like frost or smoke. Even with record-breaking heat across the state, it’s shaping up to be a good vintage. Rather, other problems are at play: Wineries have too much inventory, there’s an oversupply of grapes and consumer demand for wine is in decline. 

The California grape market is experiencing its worst down cycle since the Great Recession, said Jeff Bitter, president of Allied Grape Growers, a cooperative that represents around 400 growers in California. This cycle is “about as bad as it gets,” Bitter said, more severe than the tough times in and around 2008. While grape sales were looking slow to pick up earlier this year, farmers hoped that buying activity would increase as harvest neared. 

“Some of our worst fears have come true this year. What we thought could happen in spring or summer is in many ways coming to fruition,” said Bitter. “Some buyers will tell you, ‘I’m not buying at any price.’ It’s pretty ugly.”

All regions and grape varieties are struggling. In Monterey County, for example, Bitter said Chardonnay grapes that typically go for $1,200-$1,600 a ton have sold for as low as $400 — which would typically translate to a $4 bottle of wine. “You’re barely above the cost of picking and hauling the grapes,” he said.

While Allied works only with California growers, Bitter has received calls from growers in Oregon and Washington this year, asking for his help selling their grapes. Chad Clark, Allied’s director of North Coast operations, said wineries that have historically bought fruit through him are now calling and asking him to find buyers for their own vineyards’ grapes. “It’s a scary scenario,” said Clark. “I never thought Cabernet Sauvignon would be a difficult sell in Napa Valley.”

The desperation among growers is palpable in the classified listings on WineBusiness’ online grape market. (In June, the number of listings advertising available grapes was up 113% year-to-date.) The posts tout high scores from critics and impressive rosters of former buyers. “An insane market is playing out this year,” one seller wrote, offering Cabernet from Calistoga for $2,999 a ton. “If you have the capacity, extraordinary Napa fruit is going to be had for Central Valley prices.”

“Call for price negotiation,” wrote another grower with 30 tons of “95 Score” Cabernet priced at $4,500 a ton. “If you don’t like it, don’t take it. No risk, just your chance to make exquisite wine.”

Dylan Sheldon, who manages a 6.5-acre Calistoga vineyard, said he believes he was the first this year to post a listing on WineBusiness for Napa Valley Cabernet under $4,000 a ton — and he got only one response, which didn’t pan out. He started at $8,000, lowered his price to $3,000 and anticipates that he’ll have to go even lower. “I have to go back to 2003 when you could buy Napa Cabernet for under $3,000 a ton. That’s nuts,” he said. “We’re seeing a savage course correction right now.”These prices are unsustainable. Sheldon estimates that if he sells his grapes for $2,000 a ton, the vineyard’s owners will face a potential net loss on farming costs of $70,000 for the year. If growers can’t sell their fruit, their grapes will likely be left to rot on the vine or the ground; in the past, they could crush leftover grapes and sell the wine on the bulk market, but there’s a major oversupply there, too. “There have been whispers of people having to sell their properties if they’re not able to sell their grapes,” said Clark.

Natalie Collins, president of the California Association of Winegrape Growers, said she has seen a major increase in vineyards listed for sale, including those owned for decades by multigenerational families. 

Even growers that have contracts in place aren’t necessarily safe. When one of California’s biggest wine conglomerates, Vintage Wine Estates, filed for bankruptcy in July, it canceled many of its grape agreements, Bitter said. (Bankruptcy courts allow debtors to cancel any executory contracts, which are contracts where not all obligations have been fulfilled.) When Vintage Wine Estates sent cancellation letters to Bitter’s growers, he said, “we lost about half a million in business with them alone, and we’re only a small piece of the pie. They had dozens and dozens of contracts.” 

Wineries are also “being very creative” and “finding loopholes to get out of contracts,” said Collins. Wineries can reject grapes if they fail to reach the agreed-upon standards — like ripeness and sugar levels — laid out in their contract. This was a common occurrence in 2020, when many grapes were rejected due to the impact of wildfire smoke. But this year, Collins said wineries are finding less common reasons for rejection, and crop insurance won’t cover the losses. 

“We’re hearing situations where a grower is getting that rejection notice 20 hours after they’ve picked (the grapes), and at that point, there’s just no viable use for those grapes,” she said. “The power dynamics are so lopsided. It’s really leaving the grower holding the bag.” 

Sheldon said he has heard of wineries simply walking away from contracts this year, and growers can’t afford the legal expense to “force fruit” on them.

The problem could escalate next year. Grape pricing is usually based on the previous year’s average, reported in an annual Grape Crush Report from the U.S. Department of Agriculture. This vintage’s prices could bring that average down, putting growers at a lower starting point in 2025. “If the market remains weak,” said Bitter, “people will try to negotiate down from there.” What’s more, each year more multi-year contracts will expire, leaving more grapes without a home. 

“We need to see wine sales stabilize and begin to bounce back,” said Glenn Proctor, a partner in the wine and grape brokerage firm Ciatti. “There is a high level of cautiousness from all buyers. If we see demand in this area, then buyers can start to have more confidence in their future needs, and we think we will see more market activity.”

But Bitter worries that demand is a long-term issue and believes the best short-term solution to the crisis is to rip out grape vines to correct the oversupply, especially those that are older, underperforming or have less desirable grape varieties, like Zinfandel. Bitter has been outspoken about this, urging the California wine industry to remove 50,000 acres of grapevines statewide this year. Thus far, he estimates about 30,000-40,000 acres have been removed, but given the worsening market conditions, he said he’ll likely increase his recommendation. “Acreage is the one thing we have control over,” he said. 

Yet, with only weeks left in the 2024 harvest, many growers must first face a different, seemingly impossible decision. Sell, no matter the price — or walk away and take the loss in the hope it will help preserve the price per ton average for next year.

Graul prefers to sell, maybe to an untraditional buyer, like a hobbyist home winemaker who can “purchase small lots of premium Napa Valley Cabernet at very affordable prices that are not likely to repeat themselves in the future,” she said. 

But it’s a lose-lose scenario, Clark suggested. “Do you not put food on your table to save a market? Or do you take what you can get to have Top Ramen for the next year?”