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Australia to lose a quarter of crop to drought, frost

Nationwide drought and severe frosts could reduce Australia’s grape crop by a quarter and cause hundreds of millions of dollars in losses.

Drought is expected to reduce the crop by at least 15% and frosts – in the southeast – by at least 10%.

‘We could be looking at 500,000 tonnes less than what we now regard as the benchmark crop of two million tonnes,’ Wine Grape Growers Australia chief executive Mark McKenzie said.

With further frosts forecast in the next two weeks and further water restrictions expected to be announced later this week the losses could increase.

A 500,000 tonne loss would mean 375m litres less wine production than expected. This is about 40% of the estimated current surplus of 900m litres.

The value of the crop would be about AUS$350m less than the AUS$1.15bn value of the 2006 vintage.

While a smaller crop would help reduce the grape glut, it could be the knock-out blow for some grape growers who had been struggling for the past two or three years with lower prices, Mackenzie said.

Brett McKinnon of Orlando Wyndham warned that there were two or three weeks left in which further frosts could still occur.

He said that the full extent of the damage would not be known until the extent of secondary growth was assessed.

Among the regions hardest hit by frost have been the Limestone Coast, Victoria’s Nagambie Lakes, Yarra Valley, Heathcote and King Valley regions, and northern Tasmania. These are key cool climate regions which is where most of the surplus grapes are grown.

Five frosts in less than a month have led to Limestone Coast losses being estimated at 30% of the expected crop – a AUS$30m loss.

The Barossa Valley is estimated by Yalumba Wines’ director of winemaking, Brian Walsh, to have lost up to 7% of its expected crop which in the 2006 vintage totalled 80,000 tonnes.

The drought, which has lasted for five years in some regions, has led to water rights for irrigation in the warm climate Riverland regions, the main ‘engine room’ of grape growing, already being cut to 70% of allocations. Further restrictions are expected later this week with 50% being predicted as the next level.

Growers in the other two ‘engine rooms’, the Murray-Darling and Riverina regions, currently have 95% and 80%, respectively, of their allocations but these are soon expected to be cut.

Written by Chris Snow

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