Sample Cost to Establish Wine Grapes (2010) Sonoma County--North Coast   Cabernet Sauvignon

http://coststudies.ucdavis.edu/files/grapewinesonoma2010.pdf

Farm. The hypothetical vineyard is assumed to lie in the Alexander Valley American Viticultural Area,
Sonoma County, CA. The farm is owned and operated by the grower with assistance from a part-time foreman.
The site has less than a 5% natural slope and was previously planted to grapevines. The farm is 35 contiguous
acres, 30 of which are planted. Roads, irrigation system, and farmstead occupy the other five acres. There is no
home on the property. The land is valued at $65,000 per acre.

Two moderate-to-high yielding clones of Cabernet Sauvignon are planted in the vineyard. The first crop is
harvested in the third year and the vineyard is considered in full production by the fifth year. In this study, the
average annual yield over the life of the mature vineyard is five tons per acre; however in reality, production is
strongly influenced by the vineyard’s specific location within the Alexander Valley and by weather that may
significantly impact yield in some years.

The owner is responsible for making all of the production decisions, hiring the general laborers and operating
the machinery. Basic hourly wages are $12 for general labor and $15 for machine labor. Payroll overhead is in
addition to these wages.

Site Preparation. Immediately prior to the removal of the old vineyard, the site is sampled to assess soil
fertility and nematode populations. Both sample types are taken from areas of concern involving vine growth,
thus the number of samples can be variable. In this vineyard, soil is collected from 3 different locations at 3
depths resulting in 9 soil samples and 3 soil-root samples for nematode analysis. Removal of the old vineyard
and all land preparations up to planting the cover crop are contracted out to commercial companies. All of these
activities, up to, but not including mowing the cover crop, occur in the fall of the year prior to planting.
Although most operations that prepare the vineyard for planting are done in the year prior to planting, costs are
shown in the first year that vines are planted in Table 1.

Costs to remove the old vineyard include separation and proper disposal of plastic, metal, and pressure treated
wood that composed the old trellis and irrigation systems. Vines are pushed into a pile and burned. In practice,
there are various methods used to physically modify soil in a replant site. Soil can be ripped with two wingless
tines (shanks) in more than one direction to improve access to stored soil moisture and decrease compaction
caused by previous farming activities. Alternatively, a single winged tine can be used to make a single pass
down the future vine rows to purposely restrict rooting depth and access to total available water. In this
vineyard, the ground is ripped in three different directions to a depth of four-feet to increase rooting depth and
access to available water. After the first pass, lime, gypsum, and compost are each spread at a rate of five tons
per acre. Old vine roots are removed by hand after each pass. After the final ripping pass, 4-6 passes with a disc
to smooth the soil surface for planting follows.

Cover Crop. A cover crop seed mix that maximizes production of vegetative biomass is broadcast in the fall
over the entire 30-acre site and a drag is used on the same seeding pass. Straw is hand applied to the edges of
the vineyard including the turn-around areas, to comply with best management practices of the county
ordinance previously described. In the spring of the following year, the cover crop is mowed one time with a
flail mower then disced three times by the owner.

Vineyard Design. The vineyard is laid out in three blocks each containing 40 rows. There are two avenues
between the four blocks with turn-around space for equipment at the end of the rows. The rows are 1,000 feet
long and have 198 vines per row. Vine spacing is 8-foot by 5-foot (row-by-vine) and vines are trained to
bilateral cordons and spur pruned.

Trellis System. The trellis system, installed by a commercial trellis company, is designed to support a bilateral
cordon-trained, spur-pruned vineyard. The estimated cost includes all components and installation labor. The
vineyard is laid out in the spring of the first year, and all T-stakes, in-line and end posts and wires are installed.
Eight-foot, T-stakes are installed on five foot centers and 8-foot T-posts are installed on 15-foot centers between
stakes. Stakes and posts are driven three feet into the ground. A ten-foot, 2-7/8 inch drill pipe with a single
spade is set at the end of each row and driven 4.5 feet into the ground. The 14-gauge wire for supporting the
drip irrigation lateral (black hose) is clipped to each T-stake 14 inches above the ground and secured to each
end post. The drip lateral is attached to the drip wire with one K-curl per vine. A permanent, 12-gauge, high
tensile, cordon wire is attached to each stake and T-post, 32 inches above the ground. One 6-inch and two 8-
inch notched cross arms are installed on each T-post at 12, 24 and 36 inches above the cordon wire respectively.
In the second year, two pairs of movable, 14-gauge, high tensile wires are secured to each endpost and draped
on the cross arms. During the growing season, these movable wires are moved to the ends of the cross arms as
shoot growth occurs and are held in position by notches. The trellis system is considered part of the vineyard
since it will be removed at the time of vine removal and is shown in the vineyard establishment costs in Table 1.

Vines. Dormant, bench grafted Cabernet Sauvignon vines are planted in the early spring on an 8-foot X 5-foot spacing (row-by-vine) resulting in a planting density of 1,089 vines per acre.

In June of the first year 2% or 21 vines per acre are replanted for those lost in the first year.

In the second year 1% or 11 vines are replanted.

Vines are trained during the second and third years and expected to begin yielding harvestable fruit in three years (third leaf). They will be productive for an additional 22 years.

Planting. After the site is mowed and disced in the spring, a contractor’s crew lays out the vineyard. Each
planting spot is marked with a plastic straw. This is followed by trellis installation. In late May, a contractor
digs the holes by hand, and plants the vines. Long cartons are placed over each vine at the time of planting to
protect against wind damage and chemical weed control sprays. In early summer 2% of the vines are replanted
to replace weak or dead vines. One percent of the vines, or 11 vines per acre, are replaced in the second year.

Miscellaneous Labor. After planting general field labor does various field duties such as walking each row to
check that irrigation water is reaching each vine through the spaghetti tubing and making necessary
adjustments. They also check vines and flag dead vines for replanting in the fall.

Prune/Train/Sucker. Not all of the same practices that follow are used for other varieties or trellis systems.
Also, the experienced vineyard owner or manager will modify these practices and still successfully develop the vineyard.

First Year. Vines are monitored for growth, but are not shoot thinned or trained in the first year.

Second Year. During the plants’ first winter (February), the cartons are lifted and each vine is pruned to a single two bud spur. The carton is then replaced and retied to the stake as necessary. In spring and summer of the second growing season three passes are required to train the vines. In the first pass during late May/early June, the carton is lifted, vines are shoot-thinned to one shoot which is tied to the stake and the carton replaced. In the second pass in July, the carton is permanently removed; the vine is re-tied to the stake and topped. Because vines grow at different rates, a third pass is needed for slower growing vines, which are treated like those on the second pass. For the majority of vines on the third pass in August, lateral shoots are removed from the trunk and the top two laterals are loosely tied to the cordon wire. Additionally, on the final pass cordon shoots are topped and lateral shoots arising from the cordon shoots are stuffed inside the lower pair of moveable wires.

Third Year. In January of the second winter, pruning starts by cutting off all of the laterals from the cordons,
and topping cordons if necessary. Later in January or in February, the head of the vine is re-tied to the stake
and the cordon canes are tied to the cordon wire.

When rapid shoot growth occurs in early spring (April), the cordons are suckered. One shoot is left per spur
position and up to six spur positions per cordon are selected. At the same time, cordon extensions on vines that require them are tied. The wires are moved in three passes (May, June, July). On the May pass, approximately one-quarter of the shoots arising from the cordons require stuffing between the lower pair of moveable wires. In June, spur positions continue to be selected to total six per cordon and cordon extensions are tied as needed. During the third pass in July, all shoots arising from the cordons will be stuffed between the appropriate pair of movable wires. Crop removal (fruit thinning) may occur in June during the same pass or a separate pass in the following manner: all clusters are removed on shoots that are shorter than 24 inches in length; one cluster is allowed to remain on shoots longer than 24 inches; however no more than 10-12 clusters are allowed to remain on a vine in the third year.

Pest Management

Insects, mites

Disease. Foliar pathogens can cause disease in grapevines, but only powdery mildew, the major fungal disease,
is addressed. Powdery mildew disease is closely related to temperature and leaf wetness in the spring, and to
temperature in early summer; therefore weather conditions determine spray intervals and hence total number of
fungicide applications per year. Weather will also play a role in the choice of materials. Disease control
treatments are not made in the first and second year. Beginning in the third year, micronized sulfur (Thiolux)
and copper (Champ) are tank mixed and applied in March and April followed by three sulfur dust applications –
two in April and one in May – on alternate rows. Pristine, a product with two active ingredients each in different
groups of fungicides is applied pre-bloom in May. That application is combined with foliar fertilizers. Dusting
sulfur is again applied to alternate rows three times in June and once in July. One last powdery mildew
treatment is made in July using Rally, a material in a third fungicide group. All pesticide applications are made
using a 60 HP tractor and a vineyard duster or sprayer.

Weed/Cover Crop (Vineyard Floor Management). Beginning in the first fall after the vines are planted, a
cover crop is seeded. All centers will be mowed and disced each spring, and disced each summer of the
establishment years. The specific herbicides used in the vineyard may be affected by the presence of a Ground
Water Protection Area. For more information, contact the Sonoma County Agricultural Commissioner’s office.

First Year. In April during site preparation, the grower mows once and discs three times before the contractor lays out the vineyard. In June, vine row weeds are controlled with one contact herbicide application (Buccaneer) followed by one hand weeding pass in late summer (July). In the fall, alternate row centers are disced once and a barley cover crop is seeded in disced centers with the grower’s drill and roller.

Second Year. In the winter (January), vine row weeds are controlled with one application of a contact (Buccaneer) and pre-emergent herbicide (Prowl) mix. A second herbicide treatment is made with a contact material (Buccaneer) in the vine row in June. In March, all centers are mowed once and disced. They are disced a second time in June. In the fall (October), the same alternate row centers are disced once as were seeded the previous fall in preparation for planting a barley cover crop using the grower’s drill.

Third Year. To control vine row weeds in the winter (January), a mixture of one preemergent (Chateau) and
one post-emergent herbicide (Buccaneer) is applied. In June, the vine row is treated with Buccaneer. In March, the centers that had been seeded are mowed then disced. The alternate centers are mowed in March and June. In October, the same centers that had been seeded in the past are disced and now seeded with a grass-legume mix.

Fertilize. Fertilizer is applied through the drip irrigation system in all years of vineyard establishment. Soluble
dry and liquid formulations are injected into the irrigation system using a fertilizer injector. In the first and
second year, a liquid NPK fertilizer (3-18-18) is applied once in June, twice in July and once in August for a
total of 93.7 pounds (8 gallons) of material. In the third year, 30 pounds of a highly soluble NPK fertilizer (12-
26-26) is applied through the drip irrigation system once in April. A single application of two gallons of 3-18-
18 is made in early June. A total of 4.2 pounds per acre N and 12 pounds per acre P and K were applied. Also
in the third year, boron and zinc foliar micronutrients are tank mixed with the powdery mildew fungicide
application that occurs just prior to bloom. One pound of actual boron (Solubor) and two pounds of actual zinc
(Neutral Zinc) per acre are sprayed. Petiole samples are taken by the PCA in May for nutrient analysis.

Irrigation. The irrigation cost includes labor and water. Based on grower pumping data, pumped irrigation
water is calculated to cost $16.50 per acre-inch. The well is approximately 120 feet deep with a 10 HP pump
and standing water at approximately 50 feet deep. Price per acre-foot of water will vary by grower in this
region depending on quantity pumped, power cost, various well characteristics, and other irrigation factors. In
the first year, the irrigation sub-mains, risers, drip lines are installed and a single, one-half gallon emitter with
spaghetti tubing is punched into the drip lateral. Miscellaneous field labor walks each row to check that
irrigation water is reaching each vine through the spaghetti tubing and making adjustments as necessary. In the
second year, a second emitter per vine, without spaghetti tubing, is added to the drip line.
Irrigation water is applied weekly through August in years 1 and 2, beginning in late May or early June. Beginning in year 3, the start of the irrigation period will be in June and continue into September. No assumption is made about in-season rainfall or the irrigation system’s emission uniformity. Applied water volume by year is shown in Table A.

In practice, the amount of water applied in the production years can vary significantly due to rainfall amounts
and timing in the month preceding bud break in spring.

Frost Protection. It is assumed that the vineyard will need frost protection during the months of March, April,
and May for a total of ten nights beginning in the third year. The windmachines run for five hours per night.

Harvest. Starting in the fourth year the fruit is mechanically harvested at a contract rate of $450 per acre. It is
assumed that the grapes are delivered to a winery within the county and the hauling cost included in the harvest
cost.

Yields. Yield maturity is reached in the fifth year. An assumed average yield of 5 tons per acre over the
vineyard life is used in this study. Yields can range, depending upon the environment and location, from 3 to 8
tons per acre.

Returns. Grape buyers determine return prices per ton for winegrapes according to variety, percent sugar,
district grown and other factors. The mean weighted average price for Cabernet Sauvignon growers in Crush
District 3 over the five-year period of 2005-2009 is $2,236 per ton; therefore, that return price is used in Tables
1 and 3 in this study. A range of return prices are used in Table 5 for calculating net returns to growers at
different yields.

Post Harvest. In every third year, the cover crop centers are ripped with a winged tip shank (retro-ripped).
When these centers are ripped, gypsum at three to four tons per treated acre is applied. One third of the ripping
and gypsum costs are allocated to the budget each year.

Risk. The risks associated with producing and marketing winegrapes are significant. 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 that affect the profitability and economic viability of winegrape
production. A market channel should be determined before the vineyard is planted and brought into production.
Though not used in this study, crop insurance is a risk management tool available to growers.