Wine grape updates
2025 wine grape crops are looking favorable.
With favorable weather conditions thus far this season, wine grapes are progressing well across the West. Most expect average to above average yields with good quality fruit. Smoke-taint has not been an issue, but some are concerned heading into summer given abnormally dry soil conditions and low season-to-date precipitation levels. Smoke-taint occurs when wildfire particles get absorbed into wine grapes, causing unfavorable flavor qualities. Many growers are looking for ways to cut expenses, including limiting the number of dropping passes (removing fruit), minimally managing vineyards to limit production and/or removing acres altogether. It remains unclear what the net effect of these activities will be on total crop size.
Wine sales continued to decline year over year across on-premise, off-premise and Direct-to-Consumer channels in May 2025. The greatest declines were observed in price tiers ranging from $4.00-14.99/bottle. Anecdotal reports suggest some wineries are exploring alternative ways of reaching customers, such as hosting smaller tasting events and targeting niche markets such as cruise lines and airlines. Closures of small boutique wineries in Oregon (less than 5,000 cases/year) have been reported. Exports to Canada may be picking back up, though this is not yet reflected in trade data. Bulk wine inventories remain high, particularly for red varieties from Coastal California, and buyers are cautious to not over commit.
Profitability
June 18, 2025Wine: Slightly unprofitable - Bearish 12-month outlook
Wine grapes: Unprofitable - Neutral 12-month outlook
Falling wine demand, excess inventories and production capacity are pressuring prices and margins. Declining export demand may further challenge the industry.
The 2025 growing season could support relatively large, good-quality crops across the West. Currently, supply exceeds demand, and this is likely to continue over the next year. Producers with buyer contracts will fare better than those without.
The U.S. is the fourth largest New World (non-European) producer globally, it is the largest consumer, importing a third of its domestic supply. Key foreign suppliers include Italy, Canada, France, Australia, Chile and New Zealand. The U.S. exports 8% of its production, with about 50% split between the United Kingdom and Canada.
Wine production, exports and imports
Source: Wine Institute. U.S. Census Bureau.
Tariff tracker - Tariff rates applied to U.S. trade partners are consistenly updated to reflect policy changes. The World Trade Organization (WTO) tracks duties and tariffs on wine. For your convenience, the following link will take you to tariff data for the United Kingdom. Wine is currently exempt from tariffs for Canada under the United States-Mexico-Canada Agreement (USMCA), but please refer to the U.S. Trade Representative website for up-to-date information. WTO also tracks rates for wine imports to the U.S. Please consult with a trade lawyer or professional for detailed and up-to-date insights on tariff rates and their application to wine.
For guidance on interpreting duty and tariff rates, please refer to our Tariff Guide.
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