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Cost and Expenses

Page history last edited by Gayla S. Keesee 13 years, 1 month ago

Enterprise Budget, Wine Grapes in the Willamette Valley
PDF file with costs and returns for wine grape production in Oregon’s Willamette Valley


OSU Grape Enterprise Budget Sample

A sample of a grape budget created on the software above (chardonnay) http://www.agecon.okstate.edu/budgets/files/grapes2.1.pdf 


Agricultural Cost and Return Studies IN California (includes samples from below and others)
Cost studies for various crops in California
http://coststudies.ucdavis.edu/outreach/cost_study.php?archive=0


Sample Costs to Produce Wine Grapes (Zinfandel - 2000) Amador County, CA  (Sierra Nevada Foothills)
15 page PDF file for a five acre zinfandel vineyard in Amador County – UC Davis
http://coststudies.ucdavis.edu/uploads/cost_return_articles/2000grapessn.pdf


Sample Cost to Establish Wine Grapes (2005) (San Joaquin Valley)
19 page PDF file for vineyard establishment in Shasta County – UC Davis

http://coststudies.ucdavis.edu/files/grapewinesjv2005.pdf


Sample Cost to Establish Wine Grapes (2005) Shasta County, CA  (Intermountain region)
18 page PDF file for vineyard establishment in Shasta County – UC Davis
http://coststudies.ucdavis.edu/uploads/cost_return_articles/grapewineim2005.pdf

The 6-acre vineyard consists of 3-acres of wine grapes and land around the vineyard, all
enclosed by a surrounding deer fence, plus land for equipment storage, shop, and roads. In this case study, the
landowner purchases the 6-acres for $10,000 per acre and is the manager/operator. Another 14 acres adjoining
the vineyard is separately purchased for a homesite. Although the grower does the majority of the labor for the
operations, a labor cost (opportunity cost) is shown for each operation.

 

Site Preparation. The vineyard is planted on previously unfarmed land with scattered trees. The site
for the vineyard is level to 10% slope, southwest facing and does not require any environmental permits. Soil
samples are taken for nutrient and nematode analysis prior to ripping. In September, prior to the planting year,
a custom operator removes vegetation from the site and rips the dry soil to 3-feet deep in the vine rows. Some
areas may have buried rock in which ripping would pull them to the surface. In this case growers may not rip.
The trees and brush are pushed into a pile for disposal by burning in the winter. Vegetation is bladed off with
the subsequent regrowth controlled through a Roundup herbicide application the following spring. After land
preparation, the trellis is constructed, the drip irrigation system installed, and a deer fence built.

 

Drip System. Three-inch lateral lines are laid out in the fall prior to trellis installation. After planting,
the drip line is attached to the drip wire on the trellis system and emitters are punched. Drip system labor is
included in the total drip system costs. The drip system is considered part of the vineyard and is included in the
establishment costs.

 

Vineyard/Vines. The vineyard consist of three one-acre blocks arranged in a linear fashion with 8 rows
to each acre spaced 9-feet apart for a total vineyard width of 225 feet. Vines are spaced with rows 6-feet apart
for a total of 95 vines in each row making each row 582 feet long. An 8-foot deer fence is 50 feet away from all
sides of the vineyard requiring 671 feet of perimeter fence per acre with posts 12-feet apart. The three 8-foot
gates are each constructed as one double gate and a single gate. The total land use surrounded by the deer fence
is five acres.


Planting. Dormant benchgrafts on phylloxera resistant rootstock (Grannett, Walker and Marcum, 2002)
are planted in mid-April. A planting hole is dug, roots are trimmed and the vine planted to the appropriate
depth. In recent times, Pinot Noir is the highest valued variety in the area. Pinot Noir, Riesling, Chardonnay,
and Gewürztraminer are the common planted varieties in the area. Realizing the potential for market changes, it
may be desirable to plant more than one variety. The vines are planted on a 6 x 9-foot spacing, 806 vines per
acre. Because of the field configuration, a “middle” exists on the two outside vine rows. Therefore, 800 vines
per acre are purchased to plant 760 vine locations. Due to dead or unhealthy plants, 5% are replanted in the
second year.

 

Trellis System. The vertical shoot positioning system (VSP) is a vertical divided trellis system that
maximizes the capturing of sunlight for high yields. However, in lower elevation locations where heat and light
are intense, making the risk of fruit sunburn higher, growers may choose to use a horizontally divided canopy to
provide additional fruit shading. In the fall of the year prior to planting, holes are dug by hand with a posthole
digger to put in the end posts and grapestakes. Slotted grapestakes 8 feet long (18 inches deep in soil) are placed
every 25 feet apart with smaller stakes for vines not positioned at the grapestakes. End posts are vertical 8 foot
x 5-inch diameter wood treated posts with diagonal braces into the vineyard. All wire is high tensile 12.5 gauge:
a 12-inch drip wire, a 42-inch cordon wire and two pairs of shoot positioning wires 10-inches and 22-inches
above the cordon wire. Gripples attached to each wire tightens the wires on each row. The gripple tensioning
tool is included in the tools inventory. The system is considered as part of the vineyard since it will be removed
when the vines are removed. Therefore it is included in the establishment cost.


Training/Pruning. Training and pruning establish the vine framework and these techniques will vary
with variety and trellis system. In this study training includes pruning, tying, suckering, shoot positioning and
thinning. The vines are pruned to vertical shoot positioned (VSP) trellising. Vines are trained by a vertical
shoot position system to maximize leaf exposure to sunlight. Other trellising systems might be more
appropriate for vigorous vines on yield sites at low elevation or to provide canopy protection to fruit to reduce
sunburn.


First year vines are allowed to sprawl and grow from openended milk cartons placed over the vine to protect them from small rodents.

 

At the beginning of the second year, vines are pruned back in the spring to two buds and the cordon is established. Pruning is assumed to take five hours, plus an additional 10 hours for training. Wood smaller than a pencil is removed early in the third year vines and clusters are thinned to one or two per vine for a 0.5 ton per acre yield.

 

In the third, fourth and fifth years, it takes 17, 18, and 20 hours, respectively, for pruning in February. Sixteen hours are allocated each year from April to June for tying, shoot positioning and cluster thinning.

 

Pruning and canopy management times will vary by trellis type, variety, and vine vigor.

Pruning is done annually in March and a second pass is made to tie the vines/canes. Prunings are placed in the row middles and disked into the soil to decompose. It is assumed that it takes 20 hours per acre to prune, 4 hours to tie and 4 hours per pass for suckering, shoot thinning and positioning. Passes are made in May for suckering, shoot thinning and positioning. Passes are made in June and July for shoot positioning, cluster thinning and some tying.

 

In the first two years, the prunings are chopped and incorporated in to the soil with the disking in March.

In the third and subsequent years, the prunings are placed in the middles and chopped with a flail mower prior to the March disking.

 

Prune, Tie, and Sucker. Pruning and tying are done during the winter months (January/March) and the prunings are chopped in March during the first mowing. Cordons are retied as necessary in February. Cabernet Sauvignon tends to push very few trunk suckers thus there is no pass dedicated to remove these suckers. Cordons are suckered once a year in April with hired crew.

 

Canopy Management (CM) and Crop Adjustment. Wires are dropped during pruning. They are moved up a
total of three times (May, June, July) during each growing season in order to vertically position the canopy. In
June, leaves are mechanically removed and the vine shoots are mechanically hedged just above the top of the Tstakes. This is followed by a hand “clean up” near the vine heads.

 

In June, the crop level is adjusted by thinning. Fruit clusters are removed from shoots shorter than 18 inches in
length. Two clusters are retained on shoots that are at least 30 inches long and one cluster is retained on shoots
between 18 and 30 inches in length. In August at 95% veraison (i.e. 95% of the clusters have turned color),
there is a single “green drop” pass to remove clusters that are not fully colored.

 

Pest Management

Insects. Leafhoppers and sharpshooter control begins in the third year coinciding with canopy
development. Provado is applied in April with the second sulfur spray.

 

Diseases. Wettable sulfur is applied in early April of the second year to prevent powdery mildew. In
the third and subsequent years, wettable sulfur is applied once in March and twice in April and in May. The
grower applies the sulfur.


Weeds. Roundup is used to control weeds in the vine row in February. The middles are disked in March
for weed control, and to chop and incorporate the prunings. In the third and subsequent years, the prunings are chopped with a flail mower prior to disking. The middles are mowed for weed control in September. Roundup is applied by using a backpack sprayer with a boom in the fall of the first year and thereafter every spring. Growers who chose to control weeds through non-chemical means may need to purchase an in-row cultivator ($6000 - $10,000).


Fertilization. The grower applies 15-15-15 fertilizer by hand in the spring. Costs include a tractor to
haul the bags to the field and the application labor. Soil samples for nutrient and nematode analysis were
collected prior to planting. Fertilizer application should be based on the soil analysis; in this study it is assumed
that the fertilizer applied will supply the basic requirements.


Harvesting. Harvest starts in the third year. The grower hires three or more workers to harvest grapes
at a $0.06 per pound rate ($120 per ton) for harvest. Each worker can harvest up to a ton of grapes in a day.
The grower parks the pickup and trailer at the edge of the field and the pickers dump the grapes from their
picking buckets into the bins. The grower uses the pick-up truck and flat bed trailer to make daily 4-hour
roundtrips to the winery with up to five 1,000-pound bins or 2.5 tons of grapes. The cost per acre is allocated
accordingly.


Yield. No yield is expected the first two years, with yields of 0.5 tons per acre (1.3 lbs/vine) the third
year and increasing 1 ton per acre (2.6 lbs/vine) in the next three years to a maximum yield of 3.5 tons per acre
(9.2 lbs/vine).

 

Expectations for grapevine growth and yield in Shasta Trinity Counties.

Year 1    Fall: Site Preparation

Year  Spring                                                                                                Yield

1      Site Preparation Plant and allow maximum growth                                     None
2      Prune back to 2 buds in the spring, allow no yield and establish cordon      None
3      Prune small wood, manage growth to complete cordon, thin to limit yield   0.5 ton
4      Prune and thin to allow a 1 ton increase in yield                                         1.5 ton
5      Prune and thin to allow a 1 ton increase in yield                                         2.5 ton
6      Prune and thin to allow a 1 ton increase in yield                                         3.5 ton

 
Returns. The grapes are sold to a winery and since prices per ton fluctuate significantly due to variety,
fruit quality, market trends and overall production, this study assumes that the grower receives an average of
$1,500 per ton

 

Table B. Average grower returns per delivered ton from District 9*

    
2001
2002
2003
2004
Average
Chardonnay  
496
328
330
454
402
Gewürztraminer
950
922
879
818
892
Pinot Noir
1,776
1,462
1,587
1,441
1,566
Riesling
      1,200
1,200

 

Risk. The risks associated with crop production should not be minimized. While this study makes
every effort to model a production system based on typical, real world practices, it cannot fully represent
financial, agronomic and market risks, which affect profitability and economic viability. Growers may
purchase Federal crop insurance to reduce the production risk associated with specific natural hazards.
Insurance policies vary and range from a basic catastrophic loss policy to one that insures losses for up to 75%
of a crop. Insurance costs will depend on the type and level of coverage.

 

 

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