Palo Cortado Sherry is the rarest style of the Spanish Sherry DO wines, and originally came about by accident during the wine's aging period. Because of this, Palo Cortado is often said to "occur" rather than be made, although modern winemaking practices have lead to greater reliability in recreating the process. It is made in limited quantities and only accounts for a fraction of annual Sherry production.
The style can be said to sit somewhere between a Fino and Amontillado Sherry, having been partially aged under a yeast cap called a flor. The flor dies during the aging process and the wine is then aged oxidatively in a solera until it is bottled. In fact, the name Palo Cortado ("cut stick") comes from this distinction – casks carrying Fino are marked with a single vertical line called a palo. When the flor dies, the line gets a horizontal dash called a cortado. It is then fortified to at least 17 percent alcohol to equip it for continued oxidative aging.
Because it starts its life as a Fino, Palo Cortado is generally made from the highest quality Palomino grapes intended for the Fino's lighter style. The production method is similar to an Amontillado, but it spends less time aging under the flor, typically one to three years instead of two to eight, and the flor isn't intentionally killed by fortification. Palo Cortado wines are typically considered to have the more delicate aromas of a Fino while having the palate weight of Oloroso.
Palo Cortado is often talked about as being impossible to manufacture intentionally, which has lead to worries about its decline as a style. However, modern winemaking methods are able to recreate the environment that leads to the death of the flor and, since the 1970s, Palo Cortado has grown in popularity as a style.
There are few restrictions under the DO of what makes a Sherry a Palo Cortado, and wines that are simply blends of Oloroso with either Fino or Amontillado can also carry the label. However, most commercially available Palo Cortado wines are made in the proper way.
