NEW YORK (CNN/Money) - Record heat has scorched much of Europe this summer, sparking forest fires, shortening tempers and causing heat strokes. Tragically, more than 10,000, mostly elderly, French citizens have reportedly perished as a result of the intense weather.

Spain, Portugal, Italy and the Balkans also suffered under relentless temperatures of 100 degrees Fahrenheit or more.

Wine makers, however, are not complaining. The intense heat in Burgundy, which averaged more than 17 degrees Fahrenheit warmer than usual for the first 10 days of August, resulted in early maturity of grapes. In Bordeaux, picking began on August 12, nearly a month ahead of schedule and the earliest harvest since 1893.

The early word says the quality will be extremely good. Wine grapes have ripened better under the bright, dry conditions, according to James Gabler, author of "How To Be A Wine Expert."

Kathleen Talbert of the public relations firm Talbert Communications, which represents George DuBoeuf Wines in the United States, quotes DuBoeuf saying that this could be the vintage of his lifetime. "And he's 70 years old," she says.

Wine makers are also pleased because European production will almost certainly drop this year as the heat takes its toll. Europe will produce perhaps 10 to 20 percent less wine than usual and unfavorable late-summer weather could lower that estimate even more.

In recent years there had been a steady increase in inventories and stagnant prices.

Now producers hope that lower inventories and the great vintage will push prices higher for European wines, especially if the dollar doesn't reverse its nearly two-year slide against the euro. It should also help American producers receive higher prices for their wines as they face less competitive pressure.

California produces more than 90 percent of all wine made in the United States and has been awash in supply.

Retailer Trader Joe's has found wine inventories so abundant and cheap that it has been able to market a decent California cabernet for less than $2 a bottle, winning the offering the rather vulgar appellation of Two Buck Chuck, a play on its formal label of Charles Shaw Wines.

The global grape glut grew so severe that wine grapes went begging at times. Bill Murphy of Clos LaChance, a family-owned winery in San Martin, Calif., reports that he turned down a grower who offered him free, good-quality grapes. Grapes account for only a third to half the costs of production, and Murphy wasn't sure he could make a profitable wine even using the free grapes.

Murphy says that although the quality of this year's California harvest should be excellent, quantity will be down there as well. Cool spring rains hurt the set (the fertilization of grape flowers), and high summer humidity caused mildew in some vineyards, further diminishing the crop.

Even more importantly, some 65,000 acres of vines have come out of production in California. Growers, unable to sell their grapes, simply ripped out the plants. "I liken the wine business to the semiconductor industry in terms of cycles," says Murphy, who used to work in nearby Silicon Valley, "except the cycle is 10 years instead of four."

When prices are high, vintners rush to put in more vines. But it takes three or four years for them to come into production. Supply soon catches up to and surpasses demand, leading to a fall in prices.

Gabler says many California wineries are suffering.

Growers have battled back by thinning grapes; they cut away the weakest bunch or two on each shoot, leaving the remaining clusters to receive the concentrated strength of the plant. This results in, again, fewer better-quality grapes and less wine. Estimates are that California's harvest will diminish about 3 percent this year.

This may be the last great time to build up your cellar. Steve Mancuso, who dispenses advice on www.thewinesnob.com, says, "I'm finding that the price of wine is still dropping. Demand is down."

That could change by next year. With the diminished harvest in both California and Europe, the global wine glut should begin to ease. "California chardonnay is already in balance," according to Bill Murphy, and merlot and cabernet should be in another year or two. Prices should start creeping upward.

If prices do head north, the potentially great wines of 2003 could take a lot of the sting out of paying more for a bottle of fine vintage wine. As for the mundane vin ordinaires that the rest of us imbibe, well, Two Buck Chuck may soon have to change its name to Three Dollar Charlie.