A FRUITFUL YEAR FOR STATE'S WINE.

Byline: Sherri Buri McDonald The Register-Guard

Oregon wineries can lift a glass to another record-breaking year of grapes produced and crushed in the state.

Oregon vineyards produced 34,400 tons of wine grapes, valued at $60.2 million in 2006, according to recently released figures from the National Agricultural Statistics Service. Production was up 38 percent compared with 2005, thanks to high yields and an increase in newly producing vines, the service said.

Production in Oregon is expected to continue to rise at a healthy clip because more acreage has been planted that won't produce fruit for several years, growers say.

The huge boost in production in '06 - with more increases on the way - raises the question of whether there will be demand for all this wine, or if Oregon producers will create an oversupply.

Demand for Oregon's signature varietals, pinot noir and pinot gris, continues to be strong, industry sources say. Pinot noir sales nationally are growing at about 20 percent, said Christian Miller, founder of Full Glass Research, a wine industry marketing and research firm based in Berkeley, Calif.

"In theory the demand should be there to absorb (Oregon's increased production) in the next couple of years, provided that Oregon doesn't get swamped by California," which is also boosting its production of pinot noir, he said.

"Pinot noir and pinot gris have been growing so fast nationally, and Oregon is just nowhere near satiating the demand," said Steve Thomson, director of sales and marketing at King Estate near Lorane.

"Everybody is looking for more wine than they're producing now," he said, adding that "the lack of planted acres is the biggest bottleneck."

In Lane County, wine grape production increased 13 percent to 1,955 tons in 2006. Only one new vineyard opened in the county last year, for a total of 41. But existing vineyards are planting more acreage. Harvested acreage in Lane County was up 11 percent last year. Total planted acreage in the county was up 22 percent last year, double the rate of growth statewide, the statistics showed.

King Estate, Lane County's largest winery, is responsible for much of that increase.

"A big chunk of that is right here in King Estate," Thomson said. "We planted about 120 acres last year."

The 120 acres account for about 9 percent of the 1,378 additional acres planted statewide last year.

At the same time that the state's grape growers are expanding their vineyards, their existing vines have been more productive, boasting the highest yields in the past decade.

Thomson said the hot market for Oregon wine creates a great opportunity to build distribution outside the state.

"We're all kind of relying on this state to basically carry our business on (its) grocery shelves and wine lists," he said. "We have to find new channels to sell through, such as direct sales and export markets."

Oregon wineries have had success exporting to Canada and Japan, said Thomson, who is chairman of the Oregon Wine Export Board.

They are focusing more attention on the United Kingdom, which is a center for the European wine trade, the Pacific Rim, and Mexico and the Caribbean, he said.

It's unclear how long the Oregon pinot phenomenon will last. The cyclical wine market tends to move from shortage to glut about every 10 years, said Jonathan Oberlander, winemaker for Silvan Ridge/Hinman Vineyards, the oldest winery in Lane County. Different varietals move in and out of favor.

"In 2002-2003, you couldn't give away bulk pinot noir," he said. "A lot of people didn't know about pinot noir - it was kind of like a wine for connoisseurs in the know," he said. `Then the movie `Sideways' came out (in 2004) and gave all this attention to pinot noir, so people started looking for pinot noir.'

The market for Oregon's pinot noir and pinot gris continues to be on the upswing, Oberlander said.

Of the 15,600 acres planted with wine grapes in Oregon, 8,884 acres are devoted to pinot noir.

Pinot gris is a distant second, with 2,188 acres.

"I see this year - and maybe next year - being strong years for (Oregon) wineries," Oberlander said. "Then it depends on how demand goes."