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NEW YORK: very long.″

September 7, 1985

Undated (AP) _ The fallout from Taylor’s action is spilling over into nearby Pennsylvania, growers there said.

Prices for wine grapes are down by 30 percent this year, while volume is up by 20 percent, Dick Naylor, owner of Naylor Wine Cellars in Stewartsville and head of the Pennsylvania Wine Association, estimated.

Of total grape production, about 90 percent are concords, sold for juice and jelly, and the rest goes to the state’s 43 wineries, said Doug Moorhead, a grape farmer and owner of Presque Isle Wine Cellars.

″Up to now there have been very very few bankruptcies ... In the 70s, when we were getting pretty decent prices, growers were able to build up their equity. Now, some are showing negative values. If we have a severe frost or winter damage in 1986, I think a number will go belly up,″ he said. ″I look to 1987 for much of that to happen - at least a 20-to-25 percent reduction.″

In Virginia, ″the market has held its own this year, as it has the last two years,″ said Doug Flemmer, president of the Virginia Wineries Association.

Since 1979, the number of farm wineries - which must grow 51 percent of their own grapes - has grown from six to 29 this year, while acreage has grown from 286 to 1,405, according to the state Agriculture and Consumer Services Department.

″Because we’re working with more vinifera, we don’t have that concord stigma that is affecting New York,″ Flemmer said. ″We also don’t have a Taylor that controls so much that as they go, so the growers go.

″The vineyards listed are very small, most under five acres,″ he added. ″Most started with a connection to a winery and most this year are finding a market for their fruit.″

The situation is similar in Maryland, where prices are ″holding their own,″ said Robert Deford, president of Boordy Vineyards in Hydes and of the Association of Maryland Wineries. The state has about 20 vineyards, most under five acres, and nine wineries, he said.

″I think those (growers) who have financial relationships with wineries are doing fine. Those who don’t are casting about for a market - and they’re too late,″ Deford said.

In economic developments this past week:

-Donald E. Wilkinson, governor of the $74 billion Farm Credit Administration, the nation’s largest farm lender, said the system is facing its most severe crisis since the Depression and could be forced to begin liquidating within two years unless the federal government comes to the rescue.

-The cut-rate financing war among domestic automakers pushed car sales in late August to 71 percent above the rate for a year ago, shattering all records for the period, the companies reported.

-The Labor Department reported that the nation’s civilian unemployment rate fell three-tenths of a percentage point to 7 percent in August, the lowest level of Ronald Reagan’s presidency. But non-government economists predicted that joblessness would drift upward in the months ahead.

-The Commerce Department said construction spending climbed by a moderate 1.2 percent in July, led by sizable gains in new office buildings, government projects and in some residential housing.

-The nation’s basic money supply, known as M1 and representing funds readily available for spending, rose $2.4 billion in late August, the Federal Reserve Board reported. That continued recent growth that has left the measure well above the Fed’s growth targets.

-The major department store chains said their sales rose a bit in August from recent lackluster performances. Analysts said upscale stores again fared better than the mass merchandisers because their customers were less affected by the recent slowdown in the economy.

-Trade officials said new figures show the Reagan administration’s program to curtail foreign steel shipments is on the way toward giving the U.S. industry adequate relief from imports.

-Steel production fell to 1.600 million tons in the week ended Aug. 31, a decrease of 1.4 percent from the previous week’s 1.623 million tons, the American Iron and Steel Institute said.

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