Australia still too big say Rabobank

A report by food and agribusiness bank Rabobank has shown that the process of removing vineyards to reduce the country's over-supply of grapes is slow and falling short of the 20% reduction (30,000 hectares) that the Australian Wine & Brandy Corporation and other industry bodies had estimated was needed to bring supply into balance with demand. According to analysts the pace of vineyard removal in the temperate climate (cooler) regions where the supply/demand imbalance is most acute, had been particularly slow. In these regions vineyard owners might have stronger non-farming income and better resources to survive in the longer term.

Its estimated that 8,000 hectares of vineyards were likely to be removed in 2009/10but that three quarters were in warm inland irrigated regions where growers' profits had been affected by drought and growers has less income from sources unrelated to farming.