So many wildfires…please pray for California. We have so many wildfires.
When we pray God will forgive and heal the land and bless us–
Deuteronomy 11:14
that He will give the rain for your land in its season, the early and late rain, that you may gather in your grain and your new wine and your oil.
I just read that Napa Valley’s wildfires have damaged the wineries.
This is a huge blow to the wineries and the region as COVID19 decimated the tourism and service industries (about 70% down)
Just when we thought more people drinking wine at home would have helped the wineries , wildfires struck-
So what are the economic implications-
First, the wineries are crushed. Lot of businesses probably have some insurance but that won’t be enough. I expect some wineries shutting down, and it may provide some opportunities for bold investors to buy distressed wineries/vineyards.
So if you have money and want a winery/vineyard, this may not be a bad time to consider buying up one now and have it for generations. The graph below shows that winegrapes values have done well the past 25 years.
Second, California wine prices will go up due to constrained supply. But many customers will substitute for cheaper wine or just beer. So that won’t help much. In fact, other wineries outside of California may gain market share after the wildfires.
Third, Napa County and its cities will be in more fiscal stress. COVID19 already dried up the tourism revenue and the wildfires destroyed whatever taxes that governments could have collected.
Napa County’s unrestricted net position is a deficit already and will probably become more negative.
Without city/state bailout, Napa will have to cut down more. They may ask help from Pelosi but Trump says no deal…at least for now. Let’s see how everything plays out.
So in sum, Napa wineries and Napa County are in dire situations but those who want to own a fine Napa winery may have a great opportunity now.
Thank You Jesus for all Your blessings. Please bring us rain and heal our lands. We pray for Your love and mercy. Amen!
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