Production Budgets for Arkansas Wine and Juice Grapes

WineProductionCover 3/3/05 10:17 AM Page 1 Production Budgets for Arkansas Wine and Juice Grapes Emilio Noguera, Justin Morris, Keith Striegler, and Michael Thomsen A R K A N S A S A G R I C U L T U R A L E X P E R I M E N T S T A T I O N Division of Agriculture University of Arkansas System January 2005 Research Report 976 This publication is available on the web at: http://www.uark.edu/depts/agripub/Publications/bulletins/ Technical editing and cover design by Amalie Holland Arkansas Agricultural Experiment Station, University of Arkansas Division of Agriculture, Fayetteville. Milo J. Shult, Vice President for Agriculture; Gregory J. Weidemann, Dean, Dale Bumpers College of Agricultural, Food and Life Sciences and Associate Vice President for Agriculture–Research, University of Arkansas Division of Agriculture. SG550QX6. The University of Arkansas Division of Agriculture follows a nondiscriminatory policy in programs and employment. ISSN:1539-5944 CODEN:AKABA7 Production Budgets for Arkansas Wine and Juice Grapes Emilio Noguera Former Research Assistant Dept. of Agricultural Economics and Agribusiness Justin Morris Distinguished Professor Institute of Food Science and Engineering and Dept. of Food Science Keith Striegler Assistant Director — Viticulture Mid-America Viticulture and Enology Center Southwest Missouri State University Mountain Grove, MO 65711 Former Extension Specialist, Department of Horticulture at the University of Arkansas Michael Thomsen Associate Professor Institute of Food Science and Engineering and Dept. of Agricultural Economics and Agribusiness Arkansas Agricultural Experiment Station Fayetteville, Arkansas 72701 (a unit of the University of Arkansas System’s statewide Division of Agriculture) CONTENTS Abstract.............................................................................................................................................................5 Introduction .....................................................................................................................................................5 Production Considerations for Arkansas Grape Production ........................................................................6 Disease and Insect Considerations............................................................................................................6 Special Requirements for Growing the Various Grape Species...............................................................7 Vineyard Location Requirements..............................................................................................................8 Vineyard Establishment and Operating Costs................................................................................................8 Trellis Systems ............................................................................................................................................8 Irrigation Systems ....................................................................................................................................11 Machinery.................................................................................................................................................12 Annual Pre-harvest Costs and Budget Calculations ..............................................................................14 Budget Results ................................................................................................................................................15 Discussion.......................................................................................................................................................18 References .......................................................................................................................................................19 Appendix A: Prices and Rates Used for Budget Computations ..................................................................21 Appendix B: Sequences of Operations..........................................................................................................23 Appendix C: Production Guide for Wine and Juice Grapes........................................................................35 PRODUCTION BUDGETS FOR ARKANSAS WINE AND JUICE GRAPES Emilio Noguera, Justin Morris, Keith Striegler, and Michael Thomsen Abstract Production budgets are presented for wine and juice grapes suitable for cultivation in Arkansas. Varieties examined include V. labruscana, French-American and American hybrids, V. aestivalis, V. rotundifolia, and V. vinifera. Important production considerations specific to each of these varieties are summarized. Results indicate considerable variation in profit potential among varieties. However, one or more varieties can be profitably grown in most regions of the state. With the exception of Sunbelt, V. labruscana varieties showed the least profitability. V. rotundifolia (muscadine) varieties hold promise as a new crop for the warmer southern regions of Arkansas, while Chambourcin shows strong profit potential as a red wine grape in parts of the state with more temperate climates. Other promising varieties include Chardonel, Traminette, and Cynthiana. V. vinifera varieties also show strong profit potential, but are limited by their intense management requirements and can only be grown on the best sites. Introduction Grapes are planted in the spring. The first harvest is usually in the third year after planting, and maximum produc- This study estimates the costs, net returns, and break- tion is reached in about the fifth year. As reported by local even points for wine and juice type grapes suitable for pro- vineyards, a vineyard with proper care should remain production in Arkansas. The purpose of the study is to update ductive for 30 years or longer. Land preparation, planting, earlier cost-and-returns studies released by the Arkansas cultivation, spraying, etc. through 30 years of vineyard life Agricultural Experiment Station (Kirchner, Price, and were included in the budget requirements, resource inputs, Morris, 1988; McCollum, Price, and Morris, 1996) and meet and resulting costs and revenue. After the information was the following objectives: assembled and processed, the authors, working as an interde- partmental committee, again checked each estimate to insure 1. Provide cost information to growers, wineries, and its accuracy. processors considering a new wine or juice grape Experiences of growers and research specialists were enterprise or expanding an existing enterprise. used to project the yield obtainable with each variety. The 2. Provide background on the economic situation facing estimated quantities represent an average of the marketable grape producers in Arkansas. product that some growers currently attain. Research results 3. Communicate best practices specific to Arkansas cli- were used where applicable. matic conditions for selected varieties of wine or juice Whole analysis assumes good management in terms of grapes. production, technology, and disease and insect control meas- ures. The projected yield for each variety, although higher For the operations outlined in the budgets, it was than Arkansas' average, is attainable and can be exceeded if assumed that vineyard management would be near optimal growers follow recommended production practices. To and that all recommended practices would be followed. The address risk of yield variations due to natural disasters, recommendations were drawn from people with expertise in adverse weather such as frost or hail, and other unavoidable grape production and research at the Arkansas Agricultural environmental variations, the averages were reduced by 10% Experiment Station and wine industry management level to reflect potential loss. Although it was recognized that each and, if all operations were put into practice as listed, it would variety would not necessarily be at equal risk for hazards such be considered a relatively high level of management. The as frost/freeze damage, the hypothetical 10% reduction in assumption was made that all recommended activities would average yield potential was applied to all varieties. In general, be included. The costs were calculated as if the grower start- improved management should increase the yield of grapes to ed with a bare field and followed the budgeted pattern. the level estimated while reducing the variability of yield and quality. -5- AAES Research Report 976 Price data for various inputs used in grape production as a powder-like dusting over the entire upper surface of the were gathered during the spring and summer of 2003. Most grape leaf. Plants infected with these mildews can yield fruit prices used in the budgets represent input from local suppli- with poor size, color, and flavor. Although significant fruit ers, suppliers accessible to producers in the region, or indi- damage can result from infection during or near bloom peri- viduals familiar with grape production in the region. In a few od, loss of plant vigor from premature defoliation is usually cases, figures in-line with existing enterprise budgets cover- the most significant factor in failure to control downy and ing grape production in the middle and eastern United States powdery mildew. All grape species, especially the V. vinifera were used (Avery et al., 2003; White and Pisoni, 2001; and French-American hybrid vines, can suffer serious winter Domoto, 2001; Erb, Tisserat, and Warmann, 1999). The injury from premature defoliation. Anthracnose

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