Estimated Costs and Investment Analysis of Producing and Harvesting
Chardonnay Wine Grapes in North Carolina
Carlos Carpioa
Department of Agricultural and Resource Economics, North Carolina State University,
Raleigh, NC 27695-8109
Charles D. Safleyb
Department of Agricultural and Resource Economics, North Carolina State University,
Raleigh, NC 27695-8109
a
b
Graduate Research Assistant
Professor
1
This chapter presents the estimated costs of producing and harvesting Chardonnay
wine grapes in North Carolina along with an investment analysis that can be useful for
farmers considering planting a new vineyard or expanding an existing operation. The
monthly production sequence; the equipment, material and labor input requirements
needed to complete each operation; and the estimated costs per acre were developed for a
representative 10-acre vineyard. With some modifications for vine cost, crop value and
certain cultural practices, this budget could also be applied to other types of wine grapes
and table-grapes.
Procedure and Assumptions
Vineyard Layout
The vineyard was assumed to be rectangular in shape and planted on relatively
flat terrain. The entire vineyard layout encompassed 11.7 acres, which included 10 acres
of production space, 40-foot turn rows for operating machinery, and a 30-foot central
alley. The vines were planted in two areas, each measuring 330 feet by 660 feet, on both
sides of the central alley running through the middle of the vineyard. The grapevines
were planted 7 feet apart in rows 10 feet wide. Sixty-six rows of vines are planted in each
production area, for a total of 622 vines per acre.
Trellis System
The trellis system was a vertical shoot-positioned system as described in Noguera
et al. (2005) where multiple sets of paired catch wires are mounted on the trellis above
the cordon. The system modeled in this budget was assumed to have three sets of 13gauge catch wires, a 9-gauge wire to secure the cordon, and a fixed 12.5-gauge wire at
the top of the post.
2
An internal end-post brace assembly was employed in the trellis system (see
Chapter 5, Vineyard Establishment).This bracing technique requires a 6”x 8’ brace post,
a 6”x 8’ interior support post, and a 4”x 4” x 6’ pressure treated timber which is placed
between the brace post and the support post. The trellis system was also assumed to have
a 20-year life with a zero salvage value.
A listing of the materials and the estimated costs of each component needed to
construct the trellis system are listed in Table 1. Not surprising, the posts and bracing
timbers were the major expenses accounting for slightly over 58% ($12,816) of the total
materials costs, while the wire was the second most costly item comprising over 35%
($7,756) of the total. In addition, the equipment and labor requirements cost $1,400 and
$5,197, respectively.
Table 1. Estimated Costs of the Materials, Labor and Equipment Requirements
needed to construct a 10-acre Trellis System for the Chardonnay Vineyard
Item
Construction Materials:
Treated 4'' x 8' Vineyard Posts
Treated 6'' x 8' Brace & Support Posts
Treated 4'' x 4"x 6' Bracing Timbers
Wire, 100-pound rolls of # 9 galvanized
Wire, 100-pound rolls of #13 galvanized
Wire, 4000 ft rolls of # 12.5
Wire clips
Staples
Markers (posts and vines)
Total Materials
Equipment Requirements by Operation:
Tractor, 60HP & Trailer - distribute posts
Tractor, 60HP & Post Driver – set vineyard posts
Tractor, 60HP & Auger – set brace posts
Total Equipment Costs
Labor Requirements by Operation:
Mark rows and post locations
Distribute posts
Set vineyard posts (2 workers at 3 min/post)
Set brace posts (2 workers at 5 min/post)
String, attach & tighten wire
Total Labor Cost
Total Construction Costs
Quantity
Unit
Cost per
unit
Total
costs
1560.00
528.00
264.00
30.00
65.00
11.00
13080.00
50.00
8928.00
each
each
each
rolls
rolls
rolls
each
lb
each
5.00
7.00
5.00
74.00
74.00
66.00
0.06
0.80
0.07
7800.00
3696.00
1320.00
2220.00
4810.00
726.00
784.80
40.00
624.96
22,021.76
30.00
78.00
44.00
hrs
hrs
hrs
8.51
10.01
8.27
255.30
780.78
363.88
1,399.96
50.00
36.00
156.00
88.00
300.00
hrs
hrs
hrs
hrs
hrs
8.25
8.25
8.25
8.25
8.25
412.50
297.00
1287.00
726.00
2475.00
5,197.50
28,619.22
3
Production Practices
It was assumed that the vineyard management would be near optimal and that all
currently recommended practices by the North Carolina Agricultural Extension Service
would be followed. Of course, the actual production practices are site specific and should
be adapted to the producer’s specific situation. More information about recommended
production practices can be found in the 2005 North Carolina Agricultural Chemicals
Manual.
A comprehensive summary of the materials used and their cost are listed in Table 2.
These input prices were obtained from local dealers who regularly supply North Carolina
grape growers. Mention of a trademark, proprietary product, or vendor does not
constitute a guarantee or warranty of the product and does not imply its approval to the
exclusion of other products or vendors that also may be suitable. The pesticides
mentioned in this budget were used to calculate the application rates and costs.
The next series of tables present the detailed production and pest control programs
that were modeled in this budget. The fertilization program is shown in Table 3, the
insect control program is presented in Table 4, the disease control program is shown in
Table 5 and the weed control program is presented in Table 6. The application sequence
and the application rates are listed by production year and month for each of these
programs. The dormant pruning and canopy management programs are shown in Table 7.
The action that should be accomplished and the estimated amount of labor needed to
complete each activity are also listed by production year and month in this table.
4
Table 2. Costs of the Materials used for Chardonnay Wine Grape Production in
North Carolina
Material
Fertilizers
Lime
10-10-10
Boron (20% Solubor)
Triple Superphosphate
Herbicides
Roundup WeatherMax 5.5 SL
Gramoxone Max 3SL
Chateau 51 WDG
Poast 1.53 EC
Rely 1L
Princep 4L
Surflan AS
Select 2C
Insecticides
Sevin 80 WP
Lorsban 4E
Kelthane WP
Imidan
Fungicides
Captan 50 WP
Nova 40W
Topsin M 70 WSB
Abound 2.08 SC
Dithane DF (Mancozeb)
Sulfur WP
Elevate 50 WDG
Endura
Pristine
Other materials
Flags
Tall Fescue (cover crop)
Grape Vines
Commercial grow tubes (blue x vine shelter)
Harvest Lugs (30 lb)
Package size
Package price
$
1.0 ton
100 lb
50 lb
50 lb
38.50
12.00
35.00
8.50
2.5 gal
2.5 gal
1.0 lb
2.5 gal
2.5 gal
2.5 gal
2.5 gal
1.0 gal
175.00
120.00
100.00
195.00
185.00
37.50
270.00
175.00
10 lb
2.5 gal
3.0 lbs
4.0 lbs
63.00
40.00
46.00
36.50
5.0 lb
20 oz
5.0 lb
1.0 gal
12 lb
50 lb
1.0 lb
1.0 oz
1.0 oz
17.00
80.00
95.00
265.00
36.00
18.00
30.52
6.00
1.78
bundle
1.0 lb
each
each
each
10.00
1.00
3.50
0.64
6.80
5
Table 3. Budgeted Application Sequence and Application Rates for the Chardonnay
Wine Grape Fertilization Program in North Carolina
Production
Month
Fertilizer
year
Lime, phosphate (P2O5)
and Potash (K20)
Preparation
1
2
3
Mature Vines
Mid-May
Late April
Mid-April & MidMay
Mid-April & MidMay
10-10-10
10-10-10
10-10-10
10-10-10
Application rate
per acre
Application rates
should be based on
actual soil testsa.
4 oz per vine
8 oz per vine
6 oz per vine per
application
8 oz per vine per
application
a
For purposes of this budget, it was assumed that 3 tons of Lime and 120 lbs of Triple Superphosphate (045-0) were applied during the pre-plant operations.
Table 4. Budgeted Application Sequence and Application Rates for the Chardonnay
Wine Grape Insect Control Program in North Carolina
Production
year
1
2
3 and
thereafter
Month
Phosmet (Imidan 70 WP)
Phosmet (Imidan 70 WP)
Phosmet (Imidan 70 WP)
Carbaryl (Sevin 80 WP)
Phosmet (Imidan 70 WP)
Carbaryl (Sevin 80 WP)
Application rate
per acre
1.33 lb
1.33 lb
1.33 lb
1.25 lb
1.33 lb
1.00 lb
Carbaryl (Sevin 80 WP)
1.25 lb
July (35 days to harvest)
Chloropyrifos (Lorsban 4E)
4.50 pt
Early September (Postharvest
- Mite control)
Dicofol (Kelthane 35 WP)
1.33 lb
June
July
June
June
July
May (Pre-bloom – berry
moth, leafhopper, & flea
beetle)
June (Second cover to
Veraison: berry moth,
leafhopper, Japanese Beetle,
June Beetle)
Insecticide
6
Table 5. Budgeted Application Sequence and Application Rates for the Chardonnay
Wine Grape Disease Control Program in North Carolina
Production
Year
Month
May
June
1
June
July
August
Early September
April (Bud break)
April (1-2’ shoot)
May (10” shoot)
May (Pre-bloom)
2 and
thereafter
May (Bloom)
May (Fruit Set)
June (Shatter)
June (First cover to
Veraison)
June (Second cover to
Veraison)
July (Veraison)
July (Veraison to Harvest)
August
Early September (Post
Harvest)
Fungicide
Mancozeb 75 DF +
Nova 40W
Mancozeb 75 DF +
Nova 40W
Abound 2SC
Captan 4 L +
Endure
Captan 4 L
Mancozeb 75 DF
Mancozeb 75 DF
Mancozeb 75 DF +
Sulfur
Mancozeb 75 DF +
Sulfur
Mancozeb 75 DF +
Nova 40W
Elevate 50 WDG
Abound 2SC
Mancozeb 75 DF +
Nova 40W
Captan 50WP +
Sulfur
Captan 4L
Captan 4L
Captan 4L
Endure
Pristine
Mancozeb 75 DF
Application rate
per acre
3.0 lb
4.0 oz
2.5 lb
4.0 oz
11.5 oz
2.0 qt
8.0 oz
2.0 qt
3.0 lb
3.0 lb
3.0 lb
4.0 lb
3.0 lb
4.0 lb
3.0 lb
4.0 oz
1.0 lb
11.5 oz
3.0 lb
4.0 oz
3.0 lb
4.0 lb
2.0 qt
2.0 qt
2.0 qt
8.0 oz
10.5 oz
3.0 lb
7
Table 6. Budgeted Application Sequence and Application Rates for the Chardonnay
Wine Grape Weed Control Program in North Carolina
Production
Year
Preparation
May
June
1
August
September
May
2 and 3
4 and
thereafter
Herbicide
Glyphosate
Oryzalin (Surflan 4 AS)
Oryzalin (Surflan 4 AS) +
Paraquat (Gramoxone Max 3 SL)
Clethodim (Select 2EC)
Clethodim (Select 2EC)
Oryzalin (Surflan 4 AS) +
Paraquat (Gramoxone Max 3 SL)
Paraquat (Gramoxone Max 3 SL)
Glyphosate (Roundup WeatherMax 5.5 SL)
Application
rate per acre
2.8 pt
2.0 qt
2.0 qt
1.7 pt
6.0 oz
6.0 oz
2.0 qt
1.7 pt
1.7 pt
1.4 pt
Glyphosate (Roundup WeatherMax 5.5 SL)
1.4 pt
Flumioxazin (Chateau 51 WDG) +
Glyphosate (Roundup WeatherMax 5.5 SL)
6.0 oz
Month
June
August (spot
treatments )
September (spot
treatments)
Mid-March
June (early)
Flumioxazin (Chateau 51 WDG) +
Glyphosate (Roundup WeatherMax 5.5 SL)
Paraquat (Gramoxone Max 3 SL)
Paraquat (Gramoxone Max 3 SL)
Simazine (Princep 4 L) +
Paraquat (Gramoxone Max 3 SL)
July
August
September
1.4 pt
6.0 oz
1.4 pt
1.7 pt
1.7 pt
2.0 qt
1.7 pt
Table 7. Budgeted Chardonnay Wine Grape Dormant Pruning and Canopy
Management Programs in North Carolina
Activity
Production
Month
Activity Description
------March
March
April
June
July
June
June
July
August
June
June
July
August
No dormant pruning
Pruning and tying of canes prior to bud break
Spur pruning and cane removal
Cordon training and tying vines
Flower cluster removal
Shoot thinning
Flower cluster removal
Shoot thinning and tying vines
Shoot thinning and tying vines
Shoot thinning and tying vines
Shoot thinning
Shoot positioning and tying vines
Leaf removal
Vine trimming/hedging
Year
Dormant
Pruning
1
2
3 and
thereafter
1
Canopy
Management
2
3 and
thereafter
Labor
Requirements
(hours/acre)
0.0
10.0
31.0
10.5
2.0
21.0
8.0
10.0
10.0
10.0
10.0
30.0
20.0
10.0
8
Wildlife and Frost Control
Losses due to bird feeding, browsing by deer and frosts vary from year to year as
well as between locations and grape varieties. The options to control these problems are
also diverse. Growers should assess the economic costs and benefits of the different
alternatives before selecting a specific control method for these problems.
Bird control
Bird netting was incorporated into the budget for bird control. Bird netting is
probably the “best” choice where total, environmentally friendly control is desired.
Researchers at the University of Oregon have estimated that the investment costs for bird
netting is $800 per acre (Seavert and Castagnoli, 2004). This cost estimate was used in
the budget and it was assumed that 45 hours of labor would be required annually to install
and remove the nets.
Deer Control
Browsing by deer can be a serious problem especially in the establishment years
of a vineyard when fruit production can be delayed by a year or more. The most effective
way to eliminate browsing by deer is to enclose the area with a fence that is at least 7.6
feet high (Roberson, 1985). Lower fences, such as 4-foot-high chain-link, and decorative,
wood or metal fences will reduce, but not eliminate deer problems. Repellents such as
systemic insecticides, human hair, soap and other chemicals, as well as outdoor lighting
and artificial noise, are unreliable in preventing deer browsing. While perimeter fencing
can be installed to control deer, this expense was not included in the budget.
Frost Control
It was assumed that a fan system would be used for frost control. Some producers
in North Carolina have spent approximately $2, 800 per acre to install a gasoline-fueled
fan system, so this cost estimate was used in the budget. It was also assumed that the fan
system would be used 50 hours per year for frost control.
9
Drip Irrigation System
The amount of water required to grow Chardonnay wine grapes in North Carolina
is shown in Table 8. An estimated 9 gallons of water per vine would be needed every
week starting in the third year and continuing through the twentieth year. It was assumed
that the water source would be a pond and that the irrigation system would be capable of
providing 2.33 gallons of water per vine per hour. It was also assumed that irrigation
system must be operated 3 weeks in May, 4 weeks in June, 4 weeks in July and 1 week in
August to provide the amount of water needed.
It would cost an estimated $22,743 to purchased and install the equipment
required for the 10-acre drip irrigation system (Table 9). The annual operating costs of
the system (taxes, insurance, repair and energy) were calculated following the procedures
used by Buchanan and Cross (2002). The annual taxes were estimated to be 1.0% of the
initial equipment cost; the insurance cost was 0.5% of the initial cost; and the annual
repair cost was 5.0% of the initial cost. It was also assumed that the annual labor
requirements to operate the irrigation system would total 6% of the total irrigation time
(Turner and Anderson, 1980). The energy costs associated with operating the system
were calculated in accordance with the equations presented in Buchanan and Cross (2002)
using the following data:
(1) The flow rate = 60.5 GPM
(2) The total head = 56 PSI
(3) Pump efficiency = 0.60
(4) Electricity charge = $0.08 Kw-hr.
Table 8. Water Requirements for Chardonnay Wine Grapes produced in North
Carolina
Production
Year
1
2
3 and thereafter
Water Requirements
(gal/vine/week)
3
6
9
10
Table 9. Estimated Purchased Prices of the Drip Irrigation Equipment and the
Installation Costs for the 10-Acre Chardonnay Vineyard
Item
Design of the Irrigation System
5 HP Electric Pump
18” Media Filter Set
Compensating in-line drip tubing
(1000 FT Coil)
Other Materials
Installation
Total
Quantity
1
1
1
Total Costs
$
250.00
1,999.83
3,418.85
44
5,896.00
1
1
4,178.24
7,000.00
22,742.92
Labor Costs
The estimated hours of labor needed for each operation that involved machinery
and equipment were increased by a factor of 1.2 to account for the time needed to setup,
adjust or calibrate, and move the equipment to the vineyard (Edwards, 2002). Full-time
employees were paid $10.56 /hour. This figure was meant to be representative of the
“true” costs of labor and not just the base wage rate. These labor rates included a base
wage rate of $8.25a for hired employees plus the required payroll expenses, e.g. workers’
compensation, unemployment, and FICA taxes, and other overhead expenses. It was also
assumed that temporary employees would be hired to help construct the trellis and would
be paid $8.25 per hour.
Machinery and Equipment Costs
The estimated hourly operating costs of the machinery and equipment required for
the production of Chardonnay grapes are shown in Table 10. For purposes of this study, it
was assumed that all the machinery and equipment were purchased new at 2005 purchase
prices. The machinery and equipment used in this budget reflect machinery components
that can be used for other farming enterprises in addition to growing grapes on a typical
diversified farm. Therefore, the hours of annual use and the resulting costs per hour
reflect the equipment costs for a total farm business and not just for grape production.
a
The average wage rate for farm labor hired to perform field work was approximately $8.20 in North
Carolina in 2004 (N.C. Agricultural Statistics).
11
The exceptions to this are the blast sprayer and the irrigation equipment, which are used
solely for Chardonnay wine grape production.
The hourly operating costs for the machinery and equipment were calculated
similar to Edward’s (2002) method of estimating farm machinery costs. The total hourly
cost includes property taxes (1.0% of the purchase price), insurance (0.5% of the
purchase price), a repair costs, and fuel and lubricants costs. Fuel costs per hour were
estimated using a price of $2.39 per gallon for diesel fuel and $2.13 per gallon for
gasoline while lubricant costs were assumed to be 15% of the fuel costs. The time
required for the application of all the pesticides was assumed to be 20 minutes per acre.
For the cash flow analysis, it was assumed that the machinery or equipment would
be sold at the salvage value at the end of its “useful” life and a new machine would be
purchased. The salvage value for the irrigation system was assumed to be zero at the end
of its useful life of 20 years.
Harvesting Costs, Yields and Prices
The projected yield pattern over the 20-year life of the vineyard assumed that
there would be no adverse weather or production setbacks and that there would be no or
marketing difficulties throughout the life of the vineyard. The initial yield in the second
year was expected to be 1.5 tons per acre, increase to 3.0 tons in the third year of
production, and peak at 4 tons per acre in the fourth through twentieth years (Table 11).
The harvest was assumed to be started and completed in September. A custom
harvest rate of $100 per ton was charged to the vineyard operation for custom hand
picking and the price the growers were assumed to receive for their grapes was $1,400
per ton.
Land, Management, and Overhead Charges
Since every commodity should contribute to the financial success of a farm, a fee
was charged to the vineyard for the overall farm overhead expenses and operating capital.
Because land values vary throughout the region a land charge was not included in this
budget. However, growers should include a land charge that is representative of current
12
land values in their area. Owners should also charge a management fee to the vineyard
operation to account for their managerial ability in supervising the overall business.
Table 10. Estimated Machinery and Equipment Costs needed for the Production of
Chardonnay Wine Grapes in North Carolina.
Year
Machinery Description
0
0
0
Tractor, 60hp
Spot sprayer 26 gal
Fertilizer Spreader/seed
broadcaster
Tine Chisel Plow,7'
Disc, 9'
Utility Trailer
1/2 Ton Pickup
Total preparation year
Soil Auger + Drive
Connector 10’’
Post driver
Boom Sprayer, 60 gal
Pruning Equipment
PTO Blast Sprayer, 110 gal
Rotary Mower, 7'
Drip Irrigation System &
Pump
Total first year
Fan system and heaters (frost
protection)
Bird netting
Total third year
0
0
0
0
1
1
1
1
1
1
1
3
3
a
Purchase
Price
Salvage
Value
Years of
Life
Annual
hours
Cost per
hour
$
25,000
190
$
5,000
72
years
20
12
hours
500
50
$
11.91
0.56
395
2,500
3,500
2,000
25,000
58,585
99
625
875
500
6,250
12
15
15
15
10
100
125
125
100
650
0.94
3.57
4.69
2.39
12.47
498
2,374
700
1,000
4,000
2,000
125
594
266
100
1,520
500
15
15
12
12
12
10
50
50
100
100
100
100
1.30
6.21
1.03
5.90
3.38
-a
10,572
-
20
300
6.56
28,000
8,000
36,000
0
0
20
7
50
-
8.05
-
See Table 9 in this chapter.
13
Table 11. Projected Yields for Chardonnay Grapes Produced in North Carolina
over a 20- year Production Period
Year
0
1
2
3
4 and older
Projected Yield
(ton/acre)
0
0
1.5
3.0
4.0
Results and Discussion
Monthly Labor Estimates
The monthly and annual labor estimates required to produce an acre of
Chardonnay wine grapes are presented in Table 12. Slightly more than 6 person-hours of
labor are needed in the preparation year (year 0), 147 hours in the first year, 83 hours in
the second year, 212 hours in the third year and 204 hours after the vines reach full
production in the fourth year. In the first year, March required the majority of the labor
when the trellis was constructed and the vine holes were dug. The second largest amount
of labor was needed in April when the vines were planted and the growth tubes were
installed. In the second year, over 73% of the labor was needed from March through
September, while over 96% of the labor was utilized in the same months in the third and
fourth years. In fact, the only significant activity that does not occur in these months is in
November when the trellis is repaired. It is also important to note that the labor
requirements in September are underestimated because, as was previously discussed, it
was assumed that the labor needed to harvest the grapes would be hired at a custom rate
of $100 per ton.
14
Table 12. Estimated Annual and Monthly Labor Requirements needed to grow an
Acre of Chardonnay Grapes in North Carolina
Month
January
February
March
April
May
June
July
August
September
October
November
December
General activities
Total
0
0.00
0.00
0.00
0.00
0.00
0.00
2.20
3.07
0.00
0.00
0.00
1.00
0.00
6.27
1
0.00
0.00
63.40
33.70
6.03
5.20
23.30
2.27
6.79
0.00
0.00
0.00
6.00
146.69
Year
2
Person-hour
0.00
0.00
11.20
6.59
3.05
22.45
13.61
12.35
5.29
0.00
2.00
0.00
6.00
82.54
3
0.00
0.00
32.20
18.19
9.98
54.34
53.32
12.43
23.19
0.00
2.00
0.00
6.00
211.65
4
0.00
0.00
32.60
18.19
9.58
44.37
53.72
12.53
25.19
0.00
2.00
0.00
6.00
204.17
Costs of Establishing the Chardonnay Vineyard
If a grower has to purchase all of the machinery and equipment needed to produce
wine grapes when they establish the vineyard, the capital investment was estimated to
total $58,585 in the preparatory year, $10,572 during the first production year and
$36,000 in the third production year, (Table 10). Of course, as was previous discussed,
most of this equipment can also be used for other farming operations in a diversified farm.
The estimated cost of the trellis system was $2,862 per acre (Table 1), while the
drip irrigation system was estimated to cost $2,275 per acre (Table 9). In addition, the
annual operating costs to run the machinery and equipment, purchase the materials and
hire the labor that is needed to prepare the site, plant and maintain the vineyard until the
vines reached full production in the fourth year totaled $13,123 per acre (Table 13).
Monthly Expenses
A detailed listing of the monthly operations; the equipment, materials, and labor
requirements for each procedure; and the estimated costs associated with each operation
15
are presented in Appendix Tables 1 through 5. These monthly estimates are listed for the
major cost categories to give growers an idea of the potential annual cash flow
obligations. Growers should estimate their monthly cash flow requirements before
planting the wine grapes to ensure that they know how money must be available to meet
their financial obligations. In addition, a lending agency may require the grower to
provide this information to determine the appropriate repayment schedule if a financial
loan has to be obtained.
The monthly operating costs are also summarized in Table 13. Over 95% of the
total estimated cost in the preparation year was spent in August and December to pay for
the Chardonnay grape vines and the trellis supplies. In the first year, March accounted for
42% of the total cost per acre, primarily due to trellis construction, and the expenses in
April comprised 21% of the total cost, mainly as a result of planting the vines and
installing the growth tubes. A large amount of the expenses were incurred in June and
July during the second year primarily because the flower clusters must be removed and
the shoots should be thinned during these months. Starting in the third year, over 94% of
the total costs per acre were incurred from March through September.
Annual Production Costs for Mature Vines and Returns to Land and Management
For mature vines the total cost of producing and harvesting Chardonnay grapes
was estimated to be $3,538 per acre (Table 13). This estimate includes $400 for operating
the equipment and machinery, $593 for materials, $2,145 for hired labor, and $400 for
the custom harvest. In addition, the cost of establishing the vineyard should be included
in this estimate. Therefore, the establishment costs of the vineyard were allocated over
the productive years of the enterprise (years four through twenty) using the cost recovery
(annuity) method as suggested by the American Agricultural Economics Association
(2000). These calculations assumed a 20 year amortization period and a 7% nominal
interest rate. In this situation the cost recovery for the establishment costs was $1,562 per
year.
16
Table 13. Estimated Monthly and Annual Production Costs needed to grow and
harvest an Acre of Chardonnay Grapes in North Carolina
Total Costs
($/acre)
Month
Year 0
January
February
March
April
May
June
July
August
September
October
November
December
Annual Charges
Seasonal Charges
Total Year
0.00
0.00
0.00
0.00
0.00
0.00
55.40
2,428.38
0.00
0.00
0.00
2,212.74
35.00
41.82
4,773.34
Year 1
0.00
0.00
1,343.60
753.95
289.34
209.13
346.86
62.77
93.60
0.00
0.00
0.00
70.00
104.56
3,273.81
Year 2
0.00
0.00
118.27
154.04
205.30
372.59
314.24
182.47
246.86
0.00
21.12
0.00
70.00
104.56
1,789.45
Year 3
0.00
0.00
340.03
312.96
386.85
599.94
700.37
186.14
564.17
0.00
21.12
0.00
70.00
104.56
3,286.14
Year(4-20)
0.00
0.00
396.67
322.29
339.54
639.49
717.46
185.25
741.99
0.00
21.12
0.00
70.00
104.56
3,538.37
The net returns to land and management will depend on the marketable yield and
the price growers receive for their grapes. Including the cost recovery for the
establishment costs, the annual variable costs associated with producing and harvesting
Chardonnay wine grapes was $3,383 per acre and the annual fixed costs were $1,717.
Assuming a yield of 4 tons per acre and a market price of $1,400 per ton, the net returns
to land and management from producing these grapes was $498.79 per acre. Given the
same yield, the breakeven price, i.e. the price that just covers the total production costs,
for this vineyard operation was $1,275.30. Moreover the shutdown price, i.e. the price that
only covers the variables production costs but not the annual fixed costs, is $798.05. If
the market price ever reached the shutdown price, it would be better for the grower to
cease production rather than continue growing grapes. However, both the breakeven and
shutdown prices are below the assumed market price of $1,400 per ton.
As in most farming operations, growers have a tremendous influence on their crop
yields. The more they know about their crop and the better job they do in caring for the
17
crop, the more likely they will have higher yields of top quality fruit. On the other hand,
local markets will determine the maximum price for which growers can sell their grapes.
To analyze the sensitivity of different yield assumptions, revenues and breakeven yields
were calculated assuming different prices (Table 14).
Market prices were varied from a low of $800 per ton to a high of $2,000 per ton,
while the yield estimates were 5% and 10% above and below the average yield of 4 tons
per acre for mature vines. Total expenses per acre were adjusted to account for the
varying yields. At the average assumed price of $1,400 per ton, growers would receive a
positive return only if their yields are above 3.62 ton per acre. With prices equal to or
below $1,100 per ton, growers will always receive negative returns at any of the assumed
yields. In fact, growers would have to sell 4.7 tons per acre to breakeven if the market
price was $1,100 per ton and 6.72 tons per acre in the market price was $800 per ton.
Table 14. Estimated Returns to Land and Management ($/acre) received from
growing and harvesting Chardonnay Grapes in North Carolina for various Prices
and Marketable Yields
Price
$/ton
800
1,100
1,400
1,700
2,000
Yields (ton/acre)
3.60
-2,181.21
-1,101.21
-21.21
1,058.79
2,138.79
3.80
-2,041.21
-901.21
238.79
1,378.79
2,518.79
4.00
-1,901.21
-701.21
498.79
1,698.79
2,898.79
4.20
-1,761.21
-501.21
758.79
2,018.79
3,278.79
4.40
-1,621.21
-301.21
1,018.79
2,338.79
3,658.79
Breakeven
Yield
6.72
4.70
3.62
2.94
2.47
Chardonnay Vineyard Profitability
When judging the profitability of an enterprise, it is important not only to see how
many dollars the enterprise yields but also when the dollars come in and the returns
available in other enterprises. There are two principles to consider. First, the sooner a
dollar of revenue comes in the sooner it can be used to earn more revenue. Secondly, for
any two enterprises of equal risk, the one yielding the higher rate of return is usually
18
preferable. We will look at the flow of funds for the Chardonnay vineyard to show both
profitability and cash position (solvency).
After subtracting expenses from revenues in each year, the flow-of-funds, or net
cash flow, pattern emerges as it appears in Table 15. Growers establishing a new
Chardonnay wine grape vineyard will experience net cash outflows in the preparatory
year, and the first and third years of production. The income stream is positive in the
fourth through twentieth year.
The net accumulated cash flow is also shown in Table 15. First, we consider the
breakeven year, or year of payback, that is, the year in which growers finally get their
investment back in terms of cash flow. The breakeven year for the Chardonnay vineyard
considered in this study was eleven years. The breakeven year is an important
consideration when arranging financing because farmers must secure loans that cover the
period in which the enterprise operates in a deficit cash position. Only during the
breakeven year will enough revenues have been generated to cover start-up expenses.
The next step is to compare the net revenue stream with other opportunities.
There are two ways to do this. The first way is to assume that farmers could invest their
money elsewhere at a given interest rate, such as 6%, and compare the Chardonnay
vineyard with this other investment. The interest rate selected for this analysis should
represent the “best” low risk alternative, such as a long-term certificate of deposit,
available for off-farm investments. For a single enterprise, the essence of the net present
value (NPV) approach is that the project should be accepted if its NPV is greater than
zero. This procedure uses the discounting procedure to compare the value of a dollar at
the time of the planting decision with a dollar received for grapes at some future time.
Discounting is based on the concept that a dollar received in the future is worth less than
a dollar received today. For example, $1,000 received 10 years from now is worth $558
received today at a 6% interest rate.
Today’s cash equivalent value of applying land and management to Chardonnay
grapes for a 6% interest rate is $3,533 per acre. This figure is interpreted in just one way,
but the interpretation can be phrased in several ways. At an interest rate of 6%, for
example: a) A new, 1-acre Chardonnay vineyard as described in this analysis is worth
$3,533 per acre today or b) If a farmer was just about to establish a Chardonnay wine
19
grape vineyard, someone would have to pay him $3,533 per acre to bribe him to forget
the plans. Under these assumptions, establishing the vineyard looks profitable.
The second method for financial comparison of the vineyard with other
opportunities is to calculate the internal rate of return (IRR) on the total investment of the
Chardonnay wine grape operation and then compare this rate of return with the interest
yields on other investments. In this analysis the Chardonnay vineyard was compared to
Treasury bonds, which are typically a 20-year low risk investment. The IRR to an
investment in the Chardonnay vineyard was 8.59 %. With dividends on Treasury bonds
currently yielding around 4.25%, the vineyard operation returns look relatively good. Of
course, the revenues from grapes are more risky due to price fluctuations and weather
conditions.
Conclusions and recommendations
Profitability analysis revealed that Chardonnay grape production under the
assumed costs and conditions could be a profitable venture in North Carolina. The annual
operating costs to run the machinery and equipment, purchase the materials and hire the
labor that is needed to prepare the site, plant and maintain the vineyard until the vines
reached full production in the fourth year added up to an estimated $13,123 per acre.
Under the assumed yield and market price the estimated return to land and management
starting in the fourth year was $498/acre. Cash flow analysis also demonstrated that the
breakeven year can be achieved in the eleventh year, while the net present value of the
investment was estimated to be $3,533 per acre and the internal rate of return was 8.59%.
However, this budget is only a guide and is not a substitute for growers
calculating their own costs. Costs can vary from one producer to another because of
market conditions, labor supply, age and condition of the machinery and equipment,
education, managerial skills and many other factors. It should also be noted that the
profitability analysis did not incorporate any effects of lower production or fluctuating
market prices which could have a negative impact on the results. Since every grower’s
situation is different, it is highly recommended that each grower estimate their individual
production, marketing and harvest costs, and conduct a profitability analysis based on
their own production techniques, price expectations and local market situation.
20
Table 15. Annual Cash Flow for 1 Acre of Chardonnay Grapes over a 20-year
Period (6% discount rate)
Annual Operating Costs
Yield
Year
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
16.00
17.00
18.00
19.00
20.00
(ton/acre)
0.00
0.00
1.50
3.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
Equipment
Materials
52.25
310.65
225.54
366.85
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
399.75
4,629.58
894.34
528.53
521.29
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
593.10
Labor
91.51
2,068.82
1,035.37
2,398.00
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
2,545.52
Capital
Total
Investment
Cash
Expenses
Machinerya
($/acre)
1,091.70
5,865.04
2,845.73
6,119.54
32.64
1,822.09
3,648.96
6,935.10
3,538.37
3,538.37
3,538.37
3,538.37
3,538.37
3,538.37
1,205.00
4,743.37
3,538.37
387.60
3,925.97
48.96
3,587.33
3,538.37
73.08
3,611.45
3,538.37
800.00
4,338.37
3,538.37
3,538.37
-964.45
2,573.93
Revenue
Net Cash
Flow
Accumulated
Cash Flow
0.00
-5,865.04
0.00
-6,119.54
2,100.00
277.91
4,200.00
-2,735.10
5,600.00
2,061.63
5,600.00
2,061.63
5,600.00
2,061.63
5,600.00
2,061.63
5,600.00
2,061.63
5,600.00
2,061.63
5,600.00
856.63
5,600.00
2,061.63
5,600.00
1,674.03
5,600.00
2,012.67
5,600.00
2,061.63
5,600.00
1,988.55
5,600.00
2,061.63
5,600.00
1,261.63
5,600.00
2,061.63
5,600.00
2,061.63
5,600.00
3,026.07
Net Present Value
IRR
-5,865.04
-11,984.57
-11,706.66
-14,441.76
-12,380.13
-10,318.50
-8,256.87
-6,195.24
-4,133.61
-2,071.98
-1,215.35
846.28
2,520.31
4,532.97
6,594.60
8,583.15
10,644.78
11,906.41
13,968.04
16,029.67
19,055.75
3,533.37
8.59%
Since the machinery and equipment can be used for other farming enterprises, the capital investment reflects only the percentage of
the machinery and equipment purchase prices that were charged to the vineyard and not the complete costs of each item with the
exception of the blast sprayer and the irrigation system. These percentages were calculated based on the amount of time each item was
projected to be used for grape production relative to the estimated total hours of usage.
21
Literature Cited
Buchanan, J.R. and T.L. Cross. 2002. Irrigation Cost Analysis Handbook. Agricultural
Extension Service, The University of Tennessee, PB1721. August 8, 2005. <http://www.
utextension.utk.edu/publications/pbfiles/PB1721.pdf >.
Capps, E.R., A.H. Smith, Tony K. Wolf, A. H. Smith and B. J. Walker. 1998. The
Economics of Wine Production in Virginia. Virginia Cooperative Extension, Virginia
State University. Publication Number 463-008. November 28, 2005. <http://www.ext.
vt.edu/pubs/viticulture/463-008/463-008.html>.
College of Agriculture and Life Sciences, NC State University. 2005. 2005 North
Carolina Agricultural Chemicals Manual. August 3, 2005. <http://ipm.ncsu.edu/
agchem/agchem.html>.
Edwards, W. 2002. Estimating Farm Machinery Costs. Iowa State University. August 3,
2005 <www.extension.iastate.edu/agdm/crops/html/a3-29.html>.
Mortensen, J.A. 1981. Irrigation System for Grapes. Proc. Viticult. Sci. Symp. Florida
A&M Univ. 3:7-12.
Noguera, E., J. Morris, K. Striegler, and M. Thomsen. 2005. Production Budgets for
Arkansas Wine and Juice Grapes. Arkansas Agricultural Experiment Station. Research
Report 976.
Roberson. S.F. 1985. Deer-proof Fencing. Caesar Kleberg Wildlife Research Institute.
Texas A&I Univ. 41 pp.
Seavert, C.F. and Castagnoli, S. 2004. Establishing and Producing Wine Grapes in Hood
River County. Oregon State University, Extension Service.
22
Turner, J.H., and C.L. Anderson. 1980. Planning for an Irrigation System. American
Association for Vocational Instructional Materials. 2nd Ed. Athens, Georgia. 120 p.
23
Appendix Table 1. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 0: Preparation Year)
Activities
Costs ($/acre)
Month
Description
Materials
Equipment
Equip.
Mater.
Labor
a
Your
Cost ($/acre)
Total
July
Attend grower
meetings
Soil testing
Apply herbicide
Glyphosate
Tractor, 60 HP &
Boom Sprayer
Total July
August
Sub-soil (custom)
Plow field
Custom
Tractor,60 HP & 7'
Tine Chisel Plow
Tractor, 60 HP & 9’
Disc
Tractor, 60 HP &
Grass Drill
Disc field
Order & plant
cover crop
Apply nutrients
Lime
Triple
Superphospate
5.00
8.45
10.56
13.45
10.56
2.71
24.50
4.18
31.39
2.71
29.50
23.19
55.40
9.89
13.94
23.83
5.31
6.97
12.28
12.00
2.93
50.00
4.44
57.36
2.93
135.90
4.44
143.26
2177.00
2.64
2179.64
2362.90
32.42
2,428.38
2202.18
10.56
2212.74
0.00
2202.18
10.56
2212.74
Real Estate Taxes
Management Fee
Net Land Rent
Miscellaneous
Utilities, Legal, Accounting, Etc.
0.00
0.00
0.00
0.00
20.00
15.00
35.00
0.00
0.00
0.00
0.00
20.00
15.00
35.00
Tractor, 60 HP &
Fertilizer Spreader
Order vines
Total
August
December
33.06
Order trellis
supplies*
Total
December
Annual Administrative Costs & Taxes
Taxes
Management
Land cost
Miscellaneous
Overhead
Total Annual Administrative Costs & Taxes
Seasonal
Costs
Pick-up
Operating capital
Total Seasonal Costs
Total year 0
a
1/2 Ton Pick-up
16.48
16.48
52.25
25.34
0.00
0.00
4629.58
25.34
91.51
41.82
0.00
41.82
4773.34
The values may not equal the total due to rounding error
.
24
Appendix Table 2. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 1: Planting Year)
Activities
Costs ($/acre)
Month
Description
Materials
Equipment
Equip.
Mater.
Labor
a
Your
Cost ($/acre)
Total
March
Build trellis system
Auger vine holes
(2 workers @ 3
min/vine)
Irrigation system
preparation
Soil auger
140.00
519.75
659.75
14.35
656.83
671.18
12.67
12.67
1189.25
1343.60
10.56
10.56
218.59
218.59
398.08
398.08
126.72
355.87
524.80
753.95
108.50
21.12
129.62
8.51
16.48
18.66
2.47
25.34
10.98
60.48
2.71
54.00
4.18
60.89
3.35
9.00
4.18
16.53
4.49
35.54
190.16
6.34
63.63
10.83
289.34
2.71
64.20
4.18
71.09
3.29
14.64
Hand Labor
Total March
April
154.35
Order pruning
equipment
Plant vines (2
min/vine)
Growth tube
installation
Total April
May
0.00
Order plants&
replant (5% of
initial number of
plants)
Irrigate
Fertilize
10-10-10
Apply herbicide
Surflan
Apply fungicide
Mancozeb 75 DF
Mow alleys (1) (30'
min/acre)
Drip Irrigation
System
½ Ton Pickup
Tractor, 60 HP &
Boom Sprayer
Tractor, 60 HP &
Blast Sprayer
Tractor 60 HP &
Rotary Mower, 7'
Total May
0.00
June
Apply herbicide
Surflan +
Paraquat
Irrigate
Apply insecticide
Apply fungicide
Apply fungicide
Flower cluster
removal
Mow alleys (2) (30'
min/acre)
Imidan 70 WP
Mancozeb +
Nova 40 W
Abound 2 SC
Tractor, 60 HP &
Boom Sprayer
Drip Irrigation
System
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Rotary Mower, 7'
Total June
a
11.34
3.35
12.14
5.28
20.76
3.35
25.00
4.18
32.53
3.35
19.79
4.18
27.32
21.12
21.12
12.67
54.91
21.66
209.13
8.99
33.09
121.13
The values may not equal the total due to rounding error.
25
Appendix Table 2. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 1: Planting Year)
(Continued)
July
Irrigate
Apply fungicide
Apply insecticide
Captan
4L+Endure
Imidan 70 WP
Shoot thinning
(21 h/acre)
Mow alleys (2)
(30' min/acre)
Drip Irrigation
System
Tractor, 60 HP &
Boom sprayer
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Rotary Mower, 7'
Total July
August
Attend grower
meetings
Apply Herbicide
Apply fungicide
Select 2 EC
Captan 4L
Irrigate
Apply fungicide
(post harvest)
Select 2 EC
Mancozeb 75 DF
3.35
61.60
4.18
69.13
3.35
12.14
4.18
19.67
221.76
221.76
73.74
12.67
246.09
21.66
346.86
5.00
8.45
13.45
8.99
27.03
6.82
4.18
13.71
Tractor, 60 HP &
Boom Sprayer
3.35
13.60
4.18
21.13
0.82
3.66
2.84
4.49
13.39
25.42
6.34
23.97
10.83
62.77
Tractor, 60 HP &
Boom Sprayer
2.71
6.82
4.18
13.71
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
63.36
63.36
71.72
93.60
Growth tube
removal
Total
September
Annual Administrative Costs &Taxes
Taxes
Management
Land cost
Miscellaneous
Overhead
Investment
Total Annual Administrative Costs & Taxes
Seasonal Costs
Pick-up
Operating capital
Total Seasonal
Costs
Total year 1
14.64
2.71
Total August
September
Apply herbicide
3.29
Tractor, 60 HP &
Boom Sprayer
Drip Irrigation
System
Tractor, 60 HP &
Rotary Mower, 7'
Mow alleys (1)
(30' min/acre)
11.34
6.06
15.82
0.00
0.00
0.00
40.00
30.00
0.00
70.00
41.20
0.00
0.00
0.00
40.00
30.00
0.00
70.00
63.36
104.56
0.00
63.36
2068.82
104.56
3273.81
0.00
41.20
310.65
0.00
894.34
26
Appendix Table 3. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 2)
Activities
Costs ($/acre)
Month
Description
Materials
Equipment
Equip.
Mater.
Labor
a
Your
Cost ($/acre)
Total
March
Irrigation system preparation
Pruning (10 h/acre)
Hand Labor
Total March
April
12.67
105.60
118.27
0.00
16.48
37.32
29.57
25.34
29.57
79.14
Growth tube
installation
Fertilize
10-10-10
½ Ton Pick-up
Apply fungicide
Mancozeb 75 DF
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
Tractor, 60 HP +
Blast Sprayer
3.35
10.44
4.18
17.97
4.49
27.67
56.76
6.34
69.61
10.83
154.04
4.94
21.96
Apply fungicide
Mancozeb 75DF
+ Sulfur
Mow alleys (1)
(30' min/acre)
Tractor, 60 HP &
Rotary Mower, 7'
Total April
May
Irrigate
Apply herbicide
Apply fungicide
Apply fungicide
Apply fungicide
Apply fungicide
Surflan +
Gramoxone
Drip Irrig. System
Tractor, 60 HP &
Boom Sprayer
Mancozeb +
Sulfur
49.75
4.18
56.64
Tractor, 60 HP &
Blast Sprayer
3.35
10.44
4.18
17.97
Mancozeb + Nova
40 W
Tractor, 60 HP &
Blast Sprayer
3.35
25.00
4.18
32.53
Elevate 50 WDG
Tractor, 60 HP &
Blast Sprayer
3.35
30.52
4.18
38.05
Tractor, 60 HP &
Blast Sprayer
3.35
19.79
4.18
27.32
4.49
37.61
135.50
6.34
32.19
10.83
205.30
4.00
2.64
6.64
84.48
105.60
84.48
105.60
6.59
29.28
Abound 2 SC
Tractor, 60 HP &
Rotary Mower, 7'
Total May
June
Leaf analysis
Flower cluster
removal
Shoot thinning
Irrigate
Apply insecticide
17.02
2.71
Mow alleys (1)
(30' min/acre)
Hand Labor
Imidan 70 WP
Drip Irrigation
System
Tractor, 60 HP &
Blast Sprayer
22.69
3.35
12.14
4.18
19.67
Tractor, 60 HP &
Blast Sprayer
3.35
7.88
4.18
15.40
Mancozeb + Nova
40 W
Tractor, 60 HP &
Blast Sprayer
3.35
25.00
4.18
32.53
Captan 50
WP+Sulfur
Tractor, 60 HP &
Blast Sprayer
3.35
11.64
4.18
19.17
Apply fungicide
Captan 4L
Tractor, 60 HP &
Blast Sprayer
Apply herbicide
Gramoxone
3.35
2.65
13.60
10.20
4.18
4.18
21.13
17.03
8.99
51.07
84.45
12.67
237.07
21.66
372.59
Apply insecticide
Apply fungicide
Apply fungicide
Mow alleys (2)
(30' min/acre)
Sevin 80 WP
Tractor, 60 HP &
Rotary Mower, 7'
Total June
a
0.00
12.67
105.60
118.27
The values may not equal the total due to rounding error.
27
Appendix Table 3. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 2) (Continued)
July
Irrigate
Shoot thinning
Drip Irrig. System
22.69
6.59
105.60
29.28
105.60
Fertilize
10-10-10
½ Ton Pick-up
4.12
37.32
6.34
47.78
Apply insecticide
Imidan 70 WP
Tractor, 60 HP &
Blast Sprayer
3.35
12.14
4.18
19.67
Tractor, 60 HP &
Blast Sprayer
3.35
13.60
4.18
21.13
3.35
61.60
4.18
69.13
8.99
45.84
124.66
12.67
143.74
21.66
314.24
5.00
8.45
105.60
1.65
13.45
105.60
7.32
Apply fungicide
Apply fungicide
Captan 4L
Captan
4L+Endure
Mow alleys (2)
(30' min/acre)
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Rotary Mower, 7'
Total July
August
Attend grower
meetings
Shoot thinning
Irrigate
Apply herbicide
(spot spray)
Glyphosate
Apply fungicide
Pristine
Mow alleys (1)
(30' min/acre)
Drip Irrig. System
5.67
Gun sprayer & 30
HP + Boom
2.65
12.25
4.18
18.78
3.35
18.67
4.18
26.20
4.49
16.16
35.92
6.34
130.39
10.83
182.47
150.00
150.00
31.68
31.68
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Rotary Mower, 7'
Total August
September
Harvest (pickinglabor $100/ton)
Distribute and
remove lugs
Apply herbicide
(spot spray)
Glyphosate
Apply fungicide
(post harvest)
Growth tube
removal
Mancozeb 75 DF
Gun sprayer + 30
HP + Boom
2.65
12.25
4.18
19.08
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
6.00
21.25
29.57
219.61
29.57
246.86
0.00
0.00
21.12
21.12
21.12
21.12
Total September
November
Repair trellis
Total November
Annual Administrative Costs & Taxes
Taxes
Management
Land cost
Miscellaneous
Overhead
Investment
Total Annual Administrative Costs & Taxes
Seasonal Costs
Pick-up
Operating capital
Total Seasonal
Costs
Total year 2
Real Estate Taxes
Management Fee
Net Land Rent
Miscellaneous
Utilities, Legal,
Accounting, Etc.
Interest on
Accumulating
Investment
0.00
1/2 Ton Pick-up
0.00
0.00
0.00
40.00
0.00
0.00
0.00
40.00
30.00
30.00
0.00
70.00
0.00
70.00
41.20
63.36
104.56
0.00
63.36
1035.37
104.56
1789.45
0.00
41.20
225.54
0.00
528.53
28
Appendix Table 4. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 3)
Activities
Description
Materials
Your
Cost ($/acre)
Costs ($/acre)
Month
Equipment
Equip.
Mater.
Labor
a
Total
March
Irrigation system
preparation
Spur pruning
Hand Labor
Total March
April
0.00
Cordon training
Frost protection
Fertilize
Apply fungicide
Apply fungicide
60.14
10-10-10
Mancozeb 75 DF
Mancozeb 75DF
+ Sulfur
Mow alleys (1) (30'
min/acre)
Irrigate
110.88
123.50
27.99
3.17
33.25
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
3.35
10.44
4.18
17.97
4.49
73.42
47.43
6.34
192.11
10.83
312.96
7.41
63.36
32.94
123.50
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Rotary Mower 7'
Drip. Irrigation
system
25.53
60.14
Surflan +
Gramoxone
Tractor, 60 HP &
Boom Sprayer
2.71
49.75
4.18
56.64
10-10-10
Tractor 60 HP &
fertilizer spreader
2.09
27.99
3.17
33.25
Tractor, 60 HP &
Blast Sprayer
3.35
6.30
4.18
13.83
Apply insecticide
(pre-bloom)
Sevin 80 WP
Apply fungicide
Mancozeb +
Sulfur
Tractor, 60 HP &
Blast Sprayer
3.35
10.44
4.18
17.97
Mancozeb + Nova
40 W
Tractor, 60 HP &
Blast Sprayer
3.35
25.00
4.18
32.53
Elevate 50 WDG
Tractor, 60 HP &
Blast Sprayer
3.35
30.52
4.18
38.05
Tractor, 60 HP &
Blast Sprayer
3.35
19.79
4.18
27.32
4.49
111.70
169.79
6.34
105.37
10.83
386.86
2.64
105.60
316.80
6.64
105.60
316.80
9.88
43.92
Apply fungicide
Apply fungicide
Apply fungicide
Abound 2 SC
Mow alleys (1) (30'
min/acre)
Tractor, 60 HP &
Rotary Mower, 7'
Total May
June
Leaf analysis
Shoot thinning
Shoot positioning
Irrigate
Apply herbicide
Apply insecticide
Apply fungicide
a
110.88
63.36
2.09
Frost protection
Fertilize
12.67
327.36
340.03
Tractor, 60 HP &
Fertilizer Spreader
Total April
May
Apply herbicide
0.00
12.67
327.36
340.03
Hand Labor
Drip Irrigation
System
Gramoxone
Sevin 80 WP
Mancozeb + Nova
4.00
34.03
Tractor, 60 HP &
Boom Sprayer
2.71
10.20
4.18
17.09
Tractor, 60 HP &
Blast Sprayer
3.35
7.88
4.18
15.40
Tractor, 60 HP &
3.35
25.00
4.18
32.53
The values mat not equal the total due to rounding error.
29
40 W
Blast Sprayer
Appendix Table 4. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 3) (Continued)
Activities
Costs ($/acre)
Your
Cost ($/acre)
Description
Materials
Equipment
Month
Apply fungicide
Apply fungicide
11.64
4.18
19.17
Captan 4L
Tractor, 60 HP &
Blast Sprayer
3.35
13.60
4.18
21.13
8.99
59.12
72.32
12.67
468.50
21.66
599.94
9.88
211.20
43.92
211.20
316.80
316.80
Tractor, 60 HP &
Rotary Mower, 7’
Drip. Irrigation
system
Lorsban 4E
Captan 4L
Captan
4L+Endure
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
Tractor, 60 HP &
Blast Sprayer
3.35
13.60
4.18
21.13
Tractor, 60 HP &
Blast Sprayer
3.35
61.60
4.18
69.13
8.99
53.07
84.20
12.67
563.10
21.66
700.37
8.45
105.60
13.45
105.60
2.47
10.98
Tractor, 60 HP &
Rotary Mower, 7’
Total July
August
Attend grower
meetings
Vine trimming
Irrigate
Apply fungicide
34.03
Hand labor
Mow alleys (2) (30’
min/acre)
Apply herbicide
(spot spray)
5.00
Glyphosate
Pristine
Mow alleys (1) (30’
min/acre)
Drip. Irrigation
System
8.51
Tractor, 60 HP,
Gun Sprayer &
Boom Sprayer
2.65
12.25
4.18
19.08
Tractor, 60 HP &
Blast Sprayer
3.35
18.67
4.18
26.20
4.49
19.00
35.92
6.34
131.22
10.83
186.14
300.00
300.00
42.24
42.24
158.40
158.40
Tractor, 60 HP &
Rotary Mower 7’
Total August
September
Harvest (pickinglabor $100/ton)
Distribute and
remove lugs
Bird netting removal
Apply herbicide
(spot spray)
Hand Labor
Glyphosate
Apply fungicide
(post harvest)
Mancozeb 75 DF
Apply insecticide
Kelthane 35 WP
Tractor, 60 HP,
Gun Sprayer &
Boom Sprayer
2.65
12.25
4.18
19.08
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
3.35
9.34
20.39
41.64
4.18
513.19
27.92
564.17
Tractor, 60 HP &
Blast Sprayer
Total September
a
a
Total
3.35
Irrigate
Apply fungicide
Labor
Tractor, 60 HP &
Blast Sprayer
Total June
July
Apply fungicide
Mater.
Captan 50
WP+Sulfur
Mow alleys (2) (30’
min/acre)
Leaf removal
Bird netting
installation
Apply insecticide
Equip.
The values may not equal the total due to rounding error.
30
Appendix Table 4. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 3) (Continued)
November
Repair trellis
Total November
Annual Administrative Costs & Taxes
Taxes
Management
Land Cost
Miscellaneous
Overhead
Investment
Total Annual Administrative Costs & Taxes
Seasonal Costs
Pick-up
Operating capital
Total Seasonal
Costs
Total Year 3
a
0.00
Real Estate Taxes
Management Fee
Net Land Rent
Miscellaneous
Utilities, Legal,
Accounting, Etc.
Interest on
Accumulating
Investment
1/2 Ton Pick-up
0.00
21.12
21.12
0.00
0.00
0.00
40.00
0.00
0.00
0.00
40.00
30.00
30.00
0.00
70.00
0.00
70.00
41.20
63.36
104.56
0.00
63.36
2398.00
104.56
3286.14
0.00
41.20
366.85
21.12
21.12
0.00
521.29
The values may not equal the total due to rounding error.
31
Appendix Table 5. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 4)
Activities
Description
Materials
Your
Cost ($/acre)
Costs ($/acre)
Month
Equipment
Equip.
Mater.
Labor
a
Total
March
Irrigation system
preparation
Apply herbicide
Hand Labor
Chateau +
Glyphosate
Tractor, 60 HP &
Boom Sprayer
2.71
49.75
2.71
49.75
Spur pruning
Total March
April
Cordon training
Frost protection
Fertilize
Apply fungicide
Apply fungicide
60.14
10-10-10
Mancozeb 75 DF
Mancozeb 75DF
+ Sulfur
Mow alleys (1) (30'
min/acre)
56.64
327.36
396.67
110.88
63.36
110.88
123.50
37.32
3.17
42.58
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
Tractor, 60 HP &
Blast Sprayer
3.35
10.44
4.18
17.97
4.49
73.42
56.76
6.34
192.11
10.83
322.29
7.41
95.04
32.94
123.50
Drip Irrigation
System
Frost protection
10-10-10
4.18
327.36
344.21
2.09
Total April
May
Fertilize
12.67
Tractor, 60 HP +
Fertilizer Spreader
Tractor, 60 HP &
Rotary Mower, 7'
Irrigate
12.67
25.53
60.14
Tractor, 60 HP &
Fertilizer Spreader
2.09
37.32
3.17
42.58
Tractor, 60 HP &
Blast Sprayer
3.35
6.30
4.18
13.83
Mancozeb +
Sulfur
Tractor, 60 HP &
Blast Sprayer
3.35
10.44
4.18
17.97
Mancozeb + Nova
40 W
Tractor, 60 HP &
Blast Sprayer
3.35
25.00
4.18
32.53
Elevate 50 WDG
60 HP + Blast
Sprayer
3.35
30.52
4.18
38.05
3.35
19.79
4.18
27.32
4.49
108.98
129.37
6.34
101.19
10.83
339.54
2.64
105.60
316.80
6.64
105.60
316.80
9.88
43.92
Apply insecticide
(pre-bloom)
Sevin 80 WP
Apply fungicide
Apply fungicide
Apply fungicide
Apply fungicide
Abound 2 SC
Mow alleys (1) (30'
min/acre)
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Rotary Mower, 7'
Total May
June
Leaf analysis
Shoot thinning
Shoot positioning
Irrigate
Apply herbicide
Apply insecticide
a
Hand Labor
Drip Irrigation
System
4.00
34.03
Chateau +
Glyphosate
Tractor, 60 HP &
Boom Sprayer
2.71
49.75
4.18
56.64
Sevin 80 WP
Tractor, 60 HP &
Blast Sprayer
3.35
7.88
4.18
15.40
The values mat not equal the total due to rounding error.
32
Apply fungicide
a
Mancozeb + Nova
40 W
60 HP + Blast
Sprayer
3.35
25.00
4.18
32.53
The values may not equal the total due to rounding error.
Appendix Table 5. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 4) (Continued)
Apply fungicide
Apply fungicide
Captan 50
WP+Sulfur
Tractor, 60 HP &
Blast Sprayer
Captan 4L
Tractor, 60 HP &
Blast Sprayer
Tractor, 60 HP &
Rotary Mower 7'
Mow alleys (2) (30'
min/acre)
Total June
July
Irrigate
Drip Irrigation
System
Leaf removal
Bird netting
installation
Apply herbicide
Apply fungicide
Apply fungicide
Apply insecticide
Gramoxone
3.35
13.60
4.18
21.13
8.99
59.12
111.87
12.67
468.50
21.66
639.49
9.88
211.20
43.92
211.20
316.80
316.80
34.03
10.20
4.18
17.09
Tractor, 60 HP &
Blast Sprayer
3.35
13.60
4.18
21.13
Captan
4L+Endure
Tractor, 60 HP &
Blast Sprayer
3.35
61.60
4.18
69.13
Lorsban 4E
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
8.99
55.78
94.40
12.67
567.28
21.66
717.46
5.00
8.45
105.60
13.45
105.60
Captan 4L
Tractor, 60 HP &
Rotary Mower 7'
Gramoxone
Pristine
Mow alleys (1) (30'
min/acre)
Tractor, 60 HP &
Boom Sprayer
2.71
10.20
5.28
18.19
Tractor, 60 HP &
Blast Sprayer
3.35
18.67
4.18
26.20
Drip. Irrigation
system
8.51
2.47
10.98
6.34
132.32
10.83
185.25
31.75
61.75
400.00
400.00
52.80
158.40
52.80
158.40
Tractor, 60 HP &
Rotary Mower, 7'
Total August
September
Frost protection
Harvest (pickinglabor $100/ton)
Distribute and
remove lugs
Bird netting removal
Total September
19.17
2.71
Irrigate
Apply herbicide
4.18
Tractor, 60 HP &
Boom Sprayer
Total July
August
Apply fungicide
11.64
Hand labor
Mow alleys (2) (30'
min/acre)
Attend grower
meetings
Vine trimming
Apply herbicide
3.35
4.49
19.06
33.87
30.07
Princep +
Gramoxone
Apply fungicide
(post harvest)
Mancozeb 75 DF
Apply insecticide
Kelthane 35 WP
Tractor, 60 HP,
Gun Sprayer &
Boom Sprayer
2.71
17.70
4.18
24.59
Tractor, 60 HP &
Blast Sprayer
3.35
9.00
4.18
16.53
3.35
39.47
20.39
47.09
4.18
655.43
27.92
741.99
Tractor, 60 HP &
Blast Sprayer
33
a
The values may not equal the total due to rounding error.
Appendix Table 5. Estimated Operating Costs per acre and Production Sequence
for a 10-acre Chardonnay Wine Grape Vineyard (Year 4) (Continued)
November
Repair Trellis
Total November
Annual Administrative Costs & Taxes
Taxes
Management
Land Cost
Miscellaneous
Overhead
Investment
Total Annual Administrative Costs & Taxes
Seasonal Costs
Pick-up
Operating capital
Total Seasonal
Costs
Total Year 4
a
0.00
Real Estate Taxes
Management Fee
Net Land Rent
Miscellaneous
Utilities, Legal,
Accounting, Etc.
Interest on
Accumulating
Investment
1/2 Ton Pick-up
0.00
21.12
21.12
0.00
0.00
0.00
40.00
0.00
0.00
0.00
40.00
30.00
30.00
0.00
70.00
0.00
70.00
41.20
63.36
104.56
0.00
63.36
2545.52
104.56
3538.37
0.00
41.20
399.75
21.12
21.12
0.00
593.10
The values may not equal the total due to rounding error.
34