Jan 8, 2015

New vineyard establishment cost resource published

One of the major categories of wine grapes grown in the Great Lakes region is the hybrid. Developed primarily from European and American parents, these grapes combine favorable wine characteristics with pest tolerance and often a suitable degree of cold-hardiness for northern climates. An estimated 25 percent of Michigan’s wine grape varieties are hybrids.

Starting new vineyards and wineries is a very capital-intensive process. Cornell University economists have studied the costs of starting V. vinifera for some time. Considering the similarities between Michigan’s major wine grape areas and New York’s Finger Lakes, their work has been regarded as the best available resource to growers on this topic.

In a new publication, Cost of Establishment and Production of Hybrid Grapes in the Finger Lakes Region of New York, 2013, or EB2014-11, the same approach has been taken with hybrid wine grapes.

The 2013 estimated cost of establishing and maintaining a hybrid planting to production (three years) on a commercial scale on a prime site is $30,732 per acre in the Finger Lakes Region of New York State.

Among the assumptions made across the 13 cost categories are the cost of land, vineyard size, grape varieties, harvest methods and labor. In this paper, land was valued at $6,000 per acre, vineyard size was 50 acres, varieties planted were Corot Noir, Cayuga White, and Vidal Blanc, harvest method was by machine, and skilled labor was valued at $20 per hour. All costs are presented in a thorough manner.

The authors advise awareness of changing markets, the availability of labor, and market uncertainty when considering an investment in a wine grape vineyard.

– Joanne Davidhizar, Michigan State University