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Estimating the Value of California Wine Grapes*

  • Olena Sambucci (a1) and Julian M. Alston (a2)
Abstract

The California Grape Crush Report (Crush Report) is an authoritative source of information on production and returns per ton by variety of wine grapes that includes summaries of quantities produced and estimates of the average prices and value of wine grapes crushed in California. The data provided in the Crush Report are used to calculate the total value of wine grape production as reported in the annual Agricultural Statistics reports published by the U.S. Department of Agriculture and in major industry publications. We use the differences among crush districts in the shares of production crushed to growers’ accounts to show that the current mechanism of calculating average statewide returns per ton understates the true total value of the crush by 14 to 20 percent. We show that a more accurate estimate of the total value and average price can be obtained if the prices of the wine grapes that are sold are used to infer the prices of wine grapes that are not sold before computing the weighted averages. (JEL Classifications: Q20, Q11, Q13, Q19)

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Corresponding author
email: sambucci@primal.ucdavis.edu (corresponding author).
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*

The work for this project was partly supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, under award number 2011-51181-30635 (the VitisGen project) and award number 2015-51181-24393 (the Efficient Vineyard project). The authors are grateful for this support. We thank Daniel Sumner, the editor, and an anonymous referee for helpful comments and suggestions.

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References
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Alston, J., Anderson, K., and Sambucci, O. (2015). Drifting towards Bordeaux? The Evolving Varietal Emphasis of U.S. Wine Regions. Journal of Wine Economics, 10(3), 349378.
California Department of Food and Agriculture (CDFA). (2017a). Grape Crush Report, Final 2016. Retrieved from https://www.nass.usda.gov/Statistics_by_State/California/Publications/Grape_Crush/Final/index.php.
California Department of Food and Agriculture ( CDFA). (2017b). Historical Crush Reports. Retrieved from http://www.nass.usda.gov/Statistics_by_State/California/Publications/Grape_Crush/Reports/index.asp.
Fuller, K., and Alston, J. (2012). The Demand for California Wine Grapes. Journal of Wine Economics, 7(2), 192212.
Goodhue, R., Green, R., Heien, D., and Martin, P. (2008). California Wine Industry Evolving to Compete in 21st Century. California Agriculture, 62(1), 1218.
United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS). (2017a). Annual Agricultural Statistics. Retrieved from https://www.nass.usda.gov/Publications/Ag_Statistics/.
United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS). (2017b). California Agricultural Statistics. Retrieved from https://www.nass.usda.gov/Statistics_by_State/California/Publications/California_Ag_Statistics/Reports/.
Volpe, R., Green, R., Heien, D., and Howitt, R. (2010). Estimating the Supply Elasticity of California Wine Grapes Using Regional Systems of Equations. Journal of Wine Economics, 5(2), 219235.
Wine Institute. (2015). The Economic Impact of the California Wine and Winegrape Industry, 2015. Retrieved from http://www.wineinstitute.org/files/Wine_Institute_2015_Economic_Impact_Highlights.pdf.
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Journal of Wine Economics
  • ISSN: 1931-4361
  • EISSN: 1931-437X
  • URL: /core/journals/journal-of-wine-economics
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