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February 26, 2016 CapitalPress.com 3 Generational shift stunts USDA’s Foreign Ag Service chief wine appetites, experts say answers questions on trade deal Oregon winegrape production (Thousands of tons) By MATEUSZ PERKOWSKI Alan Kenaga/Capital Press Sources: USDA NASS; Southern Oregon University Research Center Capital Press 38.6 PORTLAND — Genera- tional changes are expected to stymie per-capita U.S. con- sumption of wine in 2016, at least temporarily stunting the longtime upward trend, ex- perts say. The “baby boomer” gen- eration, which consumes the most wine, is now preparing for retirement and feeling pressure to spend less and save more, said Mark Freund, managing director for Silicon Valley Bank, which tracks the wine industry. Meanwhile, the “millenni- al” generation faces its own fi nancial concerns — such as paying off student debt — and isn’t as dedicated to wine, he said Feb. 23 during the 2016 Oregon Wine Symposium in Portland, Ore. Over the long term, though, there’s reason to believe that history will repeat itself and young people will come to prefer wine as they grow old- er, Freund said. Other economic factors cut both ways. Fuel prices are lower, al- lowing consumers to spend more on wine, but the vola- tile stock market has raised concerns about recession and infl ation-adjusted incomes re- main fl at, he said. “It’s diffi cult for the mid- dle class to get ahead when there hasn’t been real wage growth,” Freund said. U.S. wineries can also expect to face more foreign competition. While the out- put of wine-producing coun- tries such as France, Italy and Spain has trended upward, their domestic consumption is down, he said. 78.3 2007 3 34.7 56.2 50.2 40.2 Capital Press 31.2 ’08 ’09 ’10 ’11 ’12 ’13 Oregon wine sales 2014 2.68 Sources: USDA NASS; Southern Oregon University Research Center Alan Kenaga/Capital Press 0.89 2.86 million: Up 6.9% from 2013 1 0 By MATEUSZ PERKOWSKI 41.5 (Millions of cases) 2 Up 31% from 2013 1998 ’00 ’02 ’04 That means those countries will be eager to export to the U.S., which has emerged as the top wine consumer in the world, he said. Young drinkers’ appetite for craft beer doesn’t nec- essarily have to come at the expense of the wine industry, said Christian Miller, propri- etor of Full Glass Research, a market analysis fi rm. The popularity of craft beer is associated with consumers seeking higher quality and more intense fl avors, which is a “cultural trend” that may also help wine, he said. “What they’re shedding is the Budweisers and Coors of the world,” Miller said. The millennial generation represents about 30 percent of the “high frequency” class of U.S. wine drinkers, who buy roughly 80 percent of the wine in the U.S., he said. ’06 ’08 ’10 ’12 2014 Baby boomers comprise 38 percent of high frequency wine drinkers, while the older generation represents 13 per- cent and “Generation X” rep- resents 19 percent. Sparkling wines have ex- perienced consistent growth since 2010, which may bring new consumers to the overall wine industry, Miller said. Consumers associate Or- egon wines with small pro- ducers, food friendliness and good value, though the region still isn’t as well-known as the Napa and Sonoma regions of California, he said. The main reasons cited by high-frequency drinkers for not buying Oregon wine is that they prefer wine from oth- er regions, that Oregon wines aren’t available where they shop and that Oregon doesn’t produce the varietals they commonly drink, Miller said. Cool-weather grapes challenged by warming By ERIC MORTENSON Capital Press PORTLAND — Average temperatures in various parts of the Pacifi c Northwest have risen 1.3 to 2.5 degrees since the mid-20th century, forcing changes in how vineyards and wineries operate, speakers at the annual Oregon Wine Sym- posium said. Climate change has altered the timing of harvest, changed grape ripening profi les and forced growers and wine makers to account for fl uctu- ating sugar and acid balances and to deal with new pests and diseases, said Greg Jones, a Southern Oregon University professor who specializes in wine climatology. The past year was the warmest in recorded history globally, Jones said. The “heat content” of the world’s oceans has increased tremendously, he said, which likely will have dramatic impact on weather patterns. “This may be the real issue as we go forward,” Jones said. Jones and his counterpart from France’s famed Bur- gundy region, Benjamin Jones Bois, headed a discussion that attracted an estimated 200 people. Mark Chien, co- ordinator of Oregon State University’s Wine Research Institute, moderated the dis- cussion. Chien noted that Ore- gon’s niche success within the wine industry began with cool weather grapes, Pinot noir. A warming challenges the in- dustry, he said. The wine sym- posium and accompanying trade show attract about 1,400 people annually to the Oregon Convention Center in Port- land. The agenda each year includes detailed discussions of grape growing and wine making. Many of the sessions included Spanish interpreta- tion, a nod to the workforce in most vineyards. The trade show annually features equipment dealers, label makers and suppliers of corks, barrels and tanks, among many others. Ven- dor booths ranged from one staffed by the Davis Wright Tremaine law fi rm, which has a wineries, breweries and distilleries practice group, to MaxYield Falconry, which uses falcons to chase pest birds from vineyards, or- chards or berry fi elds. The climate change pre- sentation was among the bet- ter-attended sessions. Bois, a professor of viticulture and climatology at the University de Bourgogne in France, lent some perspective to the rela- tive youth of the West Coast wine industry when he said 2003 was the earliest Burgun- dy harvest on record — which dates to the 14th century. But he said the region’s Pi- not noir wine from 2003 is in good shape, suggesting there is some “range and space” within a warming environ- ment in which wine quality is not harmed. TIME FOR A NEW TRUCK? PORTLAND — With the Obama administration in its fi - nal year in offi ce, trade offi cials want to persuade Congress to ratify the Trans-Pacifi c Partner- ship, a wide-ranging and con- troversial trade deal that would likely face an uncertain future under a future administration. Earlier this year, the 12 na- tions involved in the negotia- tions — U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam — agreed to the TPP and now must have their governments ratify it. Philip Karsting, administra- tor of the USDA’s Foreign Agri- cultural Service, recently spoke with Capital Press about the deal’s importance to U.S. farm- ers during a stop in Portland, Ore. The following conversation has been edited for length and clarity. Capital Press: What are some of the consequences for U.S. agriculture from the Trans-Pacifi c Partnership? Phil Karsting: We think there is a lot of opportunity here. Altogether the countries that are part of the TPP con- versation constitute 40 percent of global GDP (gross domestic product, a common measure of economic activity). There’s an increasing hunger for American agricultural products. One of the things the TPP does is in the beef sector. Japan already has an agreement with Australia, so their beef goes into Japan at a comparative advantage to U.S. beef. Once TPP is enforced, our folks will be able to compete on a level playing fi eld. CP: What is the danger if the U.S. doesn’t ratify the agreement? PK: The risk that we’re fac- ing is that we’d lose access and other people are going to be able to capitalize on the access they create. There is this notion in some circles that our choice as a nation is between the TPP and the status quo. That really isn’t the case. The question isn’t between TPP and the status quo, it’s between TPP — which we helped design the platform for trade — versus an evolution in trading relationships that we have no say about. CP: What are the hurdles facing its ratifi cation among the parties? PK: Because this is a 12-par- ty negotiated agreement, you can’t just pull one thing out and say we’re going to renegotiate X, Y and Z. It doesn’t work that way. If you pull one thing out, that means something else Karsting falls off in an- other part of the agreement because it’s all wo- ven together. The way it would enter into force is when 85 per- cent of the GDP of the countries involved agree to it. As a practi- cal matter, that means we need the United States and Japan and then a few more. And if a coun- try doesn’t agree to it, then they don’t get the benefi ts of it. CP: Critics of the deal have complained about the enforceability of labor stan- dards included in it, as well as a confl ict resolution mech- anism known as investor-state dispute settlement, in which a company can legally challenge the regulations of a TPP sig- natory outside that country’s court system. How do you re- spond to these concerns? PK: On the labor standards, we have never had a multi-lat- eral trade agreement that has as enforceable labor standards as this one. It has disciplines (en- forceable standards) on forced labor, child labor. Vietnam, for instance, is going to have to make some changes in how it does business to comply with the rules of TPP on minimum wage and those sorts of things. We’ve never had as many labor-friend- ly provisions baked into the sub- stance of a trade agreement as we have on this one. On the investor-state dispute settlement piece, the U.S. is party to a whole lot of investor state dispute settlement treaties, and we’ve never lost a case that’s been brought against us. It’s not a big threat to America’s legal system or to America’s way of life. The whole premise of ISDS is to create a frame- work where U.S. investors overseas can be assured they’ll receive fair treatment in a for- eign country. ROP-32-52-2/#17 U.S. per-capita wine consumption expected to halt temporarily Obama administration hoping to ratify Trans- Pacifi c Partnershi p Take a new look at an old friend. Shelly Boshart Davis Oregon Aglink Board Member She is a third generation farmer who produces grass seed, hazelnuts, wheat and bale grass straw along with two of her siblings and her parents. They also have a trucking export business, providing transportation services to local farmers in Oregon. 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