Better grape price offset by low yield

The pre-tax income for Marlborough vineyard owners was down by 40 per cent for the 2011-12 year because of low grape yields, according to a government report.

The Primary Industries Ministry has released an analysis of viticulture production and profitability, labelled the 2012 Viticulture Monitoring Programme.

The report is based on models of a vineyard in Marlborough and one in Hawke's Bay and an overview of the financial performance of typical vineyards. That performance is based on information from a sample of growers and industry stakeholders.

The Marlborough model of 30 producing hectares draws on data from 18 vineyards, mostly in the Wairau Valley, and three in the Awatere Valley.

The before-tax profit for the Marlborough model dropped 42 per cent to $96,900, or $3230 a hectare, for the year ending June 30.

The drop in profit was mainly because of a 20 per cent fall in average yield per hectare, including a 16 per cent drop in yield of sauvignon blanc compared to the previous year, the report says.

Despite the price of sauvignon blanc grapes increasing for the first time in four years to $1315 a tonne, it was not enough to cover the shortfall.

Ministry Nelson-based senior policy analyst Nick Dalgety said the lower yields helped bring the market back into balance despite the brutal drop in grower earnings.

"The outlook for 2013 is positive, with the benchmark model vineyards forecasting an appreciable rise in prices achieved per tonne."

Mr Dalgety's positive outlook echoes that of people in the Marlborough wine industry who have said the low yield has swung the pendulum of supply and demand back in favour of grape growers.

The Marlborough model recorded vineyard working expenses at $7647 a hectare during 2011-12, similar to the previous two years and down 24 per cent from 2008-09.

Mr Dalgety said keeping vineyard working expenses to a minimum reflected continued efforts by growers to manage expenses in line with reduced income from grapes.

“Growers believe that changes made to vineyard practices in recent years to reduce costs will be able to be maintained longer term,” he said.

Changes included setting up tractors with machinery so several jobs could be done at once and introducing mechanised vine strippers during pruning.

“A more sustainable business return would enable much-needed reinvestment in vineyards, especially to support a rolling maintenance plan to replace old, diseased and less marketable vines.”

There was little change in other working expenses, which totalled $2740 a hectare. Savings were made by a 20 per cent decrease in fertiliser application, but lower use of fertiliser will reduce yields文章来源中国酒业新闻网 and may impact grape quality, the study said.