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The Economics of Replanting Generic Wine Grape Varieties in New York

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Abstract

There has been an interest in replanting generic wine grape varieties; however, the prices of these grapes have been in the range of $200-250 per ton in recent years, low by historical standards. There is a need to identify varieties which are useful and profitable to the winery, consistent in production, and which can be efficiently produced in New York vineyards so that the value of the grapes to the winery better matches the cost of grape production. Elvira may be one variety which meets these criteria. This research was undertaken to (1) evaluate the yields, costs, and practices associated with replanting and growing Elvira grapes using the soil and managerial resources of New York growers; and (2) to evaluate the profitability and financial feasibility for these growers to convert their existing vineyards to the Elvira variety. Mail questionnaires were sent to 50 of Elvira growers to assess the size of operation, land use, Elvira acreage and yields, training system, pruning practices, cash expenses and farm debt. Removal and replanting costs for site preparation, year of planting, and second and third year of development were estimated at $4,606 per acre. This results in an annual cost of capital recovery of $488 per year for the 22 years remaining life of the vineyard. Average debt per acre of grapes for the 23 farms who responded on the survey was $848 per acre. Five year average yields (1991-1995) for the respondents was 7.5 tons per acre for the Elvira acreage. At an average price of $202 per ton, returns to management were -$143 per acre. At an average yield of 7.5 tons per acre, a price of $221 per ton would be necessary to break even. Conversely, at an average price of $202 per ton, the break even yield was 8.4 tons per acre. Growers should consider the risk that is involved in replanting a vineyard. For example, prices may decline over time, or yields may not average those projected at the time of planting. Also, Elvira has limited marketing alternatives. Other varieties (e.g. Aurore, Cayuga White, or Melody) are also adaptable to high yielding, labor efficient technology, but have more potential alternative markets than Elvira.

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R.B. 97-05

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1997-04

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Charles H. Dyson School of Applied Economics and Management, Cornell University

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Applied Economics

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