Crisis for winegrape growers

A SHARP fall in farm-gate value and grape crush in the Murray Valley is being described as an "absolute crisis".

Murray Valley Winegrowers chief executive Mark McKenzie said the latest crush survey showed a 30.4 per cent drop to $80.63 million for a region in which growers earned almost $200 million just five years earlier.

Mr McKenzie said the figures showed the wine grape sector in the Murray Darling and Swan Hill wine regions had hit rock bottom.

He urged wineries to increase prices next vintage to encourage enough growers to stay in business to supply emerging future markets including China.

"The loss of another $35 million in farm-gate revenue to growers this year underlines the severity of the grower financial crisis," Mr McKenzie said.

"The message to wineries is now very clear that the wine grape sector here will not endure without a rise in grape prices in 2011 to get growers back to at least covering their vineyard operating costs."

Mr McKenzie said average prices were now well below the region's average cost of production which was $376 a tonne.

The survey found the average price paid for red wine grape varieties had fallen 31 per cent to $311 a tonne and the average price for white varieties had dropped 28 per cent to $283 a tonne.

As well as plummeting prices, the total crush fell 47,176 tonnes to 328,147 tonnes, taking the drop in production during the past six years to 114,483 tonnes, although the quantity of winery-grown grapes remained steady at 55,000 tonnes.

The best price paid for any grapes was $1238 a tonne for shiraz, tempranillo and viognier, while the lowest prices paid were $80 a tonne for cabernet sauvignon, merlot and also viognier.

The annual survey, produced by the Victorian Department of Primary Industries, was based on responses from 28 wineries who bought grapes from the region's growers, including Vintage Traders, which was formed in November 2006 by a small group of "determined growers".

Vintage Traders chairman Phillip Englefield, who grows grapes at Robinvale, said change was urgently needed or it would only be a matter of a few years before the once powerful Australian wine industry was reduced to a "cottage industry".

The full survey report is available at the Murray Valley Winegrowers' website.