Oregon wine industry emerges as a mighty ag force
THE DALLES, Ore. – This is a good place to start talking about the rippling impact of Oregon’s “alcohol cluster,” as a state economist calls it. Right here, on the welding shop floor of AAA Metal Fabrication with foreman Antonio Morales, where a half-dozen stainless steel fermentation tanks stand in various stages of production.
The Pacific Northwest’s booming wineries, joined now by breweries, distilleries and hard cider makers, are clamoring for tanks, and AAA Metal Fab is one of the few places that make them.
“We are not able to meet the demand,” company President Chris Parks said. “It’s a nice problem to have, let’s put it that way. We see enough coming into production that there’s going to be years’ worth of tanks needing to be built.”
A January report by Full Glass Research estimated the Oregon wine industry alone bought $8.4 million worth of stainless steel tanks in 2013 as it scrambled to process increasingly large harvests.
That means jobs – good ones, with plenty of overtime work – for foreman Morales, his brother, his nephew and other relatives among AAA Metal’s 14 to 16 employees. The same Full Glass Research report lists the average annual wage in Oregon’s heavy-gauge steel manufacturing sector, which includes firms much larger than AAA Metal, as $56,669.
Welding stainless steel takes skill, and the shiny tanks have to be finished to food-grade quality to prevent bacteria from growing inside. Surprisingly, none of the company’s welders has had special training; they all learned on the job.
“All of these guys started from the bottom,” Morales said. “Sweeping floors, cleaning up. They learned by being here.”
Continued expansion and investment by wineries, breweries and distillers has AAA Metal and its workers in a “really good position right now,” Morales said.
“We just keep going,” he said. “We just keep making tanks.”
$3.35 billion impact
The recent Full Glass Research report estimates the economic impact of Oregon’s wine industry at $3.35 billion, counting crop value and direct and indirect jobs, wages, sales and services. The report is the work of California market analyst Christian Miller, a self-described “data geek” who studies the industry.
The report details an industry that has come of age. Although tiny compared to California and smaller than neighboring Washington, Oregon’s vineyards and wineries have carved out a niche that is economically, aesthetically and socially successful.
In an interview after his “state of the industry” presentation at the recent Oregon Wine Symposium in Portland, Miller said the wine industry has a bigger ripple effect in the economy than other agricultural sectors. Wine-related tourism alone – all those cars streaming to tasting rooms off Highway 99W in Yamhill County – pumps $207 million annually into the Oregon economy and employs 2,623 people, Miller said.
All told, Miller counts more than 17,000 wine-related jobs in Oregon and $527 million in wages. Senior state economist Josh Lehner, in a February report, said the number of jobs in wineries, breweries, distilleries and their distributors and retail outlets increased 46 percent since the start of 2008.
By Miller’s estimate, the 2013 wine grape crop was worth $128 million and became the most valuable of Oregon’s fruit and nut crops, passing hazelnuts, blueberries, pears, cherries and other stalwarts. The National Agricultural Statistics Service had grapes in second that year with $107 million value, behind hazelnuts, but the giant grape harvest of 2014 may have reconciled any differences.
At any rate, the value of Oregon’s wine grape crop has quadrupled since 2004, Miller said. The average price per ton paid for Oregon grapes in 2013 was $2,249, far more than the $713 per ton average paid to California growers and $1,110 paid to Washington growers. Only California’s Napa County had a higher price per ton, at $3,683. The discrepancy with California’s average price is due to the large volume of lower-quality grapes grown in the Central Valley, according to the report. Those grapes are used in “low-value uses” such as concentrate, according to the report.
The price is another distinguishing feature of the Oregon wine industry, Miller said: It started by focusing on high-value, high-quality wine, particularly pinot noir, and has stayed that way.
By all accounts, the industry’s founding fathers and mothers were and are quirky, driven people who collaborated in order to survive. The people who followed them include many who were accomplished in other fields, are highly educated and brought resources with them. Grape growing and wine making is a marriage of science and art, and its practitioners tend to be hard chargers.
It’s fair to say some of Oregon’s traditional, conventional farmers believe the wine industry distances itself from them; vineyard producers are not particularly engaged in the Oregon Farm Bureau, for example.
Other farmers can’t help but notice the attention and money flowing to the wine industry, and worry it will bend legislation its way as well. This past year, a couple of vineyard operators loudly complained that spray drift from grass seed or Christmas tree operations was damaging grape vines. Traditional farmers resent the issue being taken public rather than worked out among farmers, as is usually done in Oregon.