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High and dry

Published:  23 July, 2008

2006 was the driest year on record in many parts of Australia. Even though temperatures did not reach the history-making heights of 2005, new research published in November by the University of Melbourne and Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO) forecast temperature increases of 0.3 to 1.7C in most Australian wine regions by 2030.

Rising water costs

Inevitably, the drought is putting pressure on water supplies, and the availability of irrigation water has put growers in a vulnerable position. Rainfall over the Christmas period and early January did little to alleviate the effects of the drought, despite postponing the defeat of England's cricketers at the Melbourne Cricket Ground for a short while.

South Australian irrigators are among the hardest hit by the low river system inflows, as the price of leasing water has soared to more than 10 times the levels of this time last year. In December 2005, water cost AUS$46 a megalitre. It is now being sold for about AUS$500 a megalitre. Vineyards are now permitted just half of their water allocation.

Conservative estimates predict the drought, coupled with the late spring frosts in October - which wiped out entire vineyards along the Limestone Coast - will cut the 2007 crop by 600,000 tonnes. In 2006, the total Australian grape crop, according to the Australian Bureau of Statistics, stood at more than 1,800,000 tonnes, and that represents a reduction of more than 30%.

Chalmers says this means that there will be virtually no surplus: The wineries in the Murray area are buying a lot of fruit this year because they're worried there won't be enough fruit next year. Vines will die if we don't have any rain. so growers are choosing which patches of vines to save.'

Indeed, Constellation declared that the 2007 crop will be approximately 15-25% smaller than last year, but it has taken an optimistic view toward the effects of the drought - seeing it as a solution to the wine glut.

Unveiling its third quarter sales at the start of January, the company took the opportunity to comment on the situation: The effects of ongoing drought conditions may impact the size of the 2008 harvest. Significant reductions in the 2007 and 2008 harvests could impact the oversupply and may result in firming prices for Australian bulk wine.'

Chalmers remains upbeat in the face of current adversity: It'll be fine. This is a cycle, and I think it's a wake-up call. We can't get any more efficient, so the vineyards that are using too much water will either get more efficient or just drop out of the industry. That can only be good for quality.'

Even so, his company is being forced to consider drilling 400 metres underground to source water that will then need desalinating. (Vines have a very low level of tolerance to saline irrigation water, and it affects the quality of the yield.) The process is extremely expensive, at 10 times the cost of normal water treatment, but may be the only way the vineyard can survive if both Webb and the Met office have their predictions right.