Financial Factors
Revenue
Although a larger vintage improved supply in 2002, the average price of grapes continued to increase, particularly for key export varieties. Increases were experienced for the following varieties in 2002:
- Sauvignon Blanc - $2,100/tonne ($1,800/tonne in 2001);
- Chardonnay - $1,600/tonne ($1,400/tonne in 2001); and
- Gewürztraminer - $2,000/tonne ($1,700/tonne in 2001).
Demand for Pinot Noir remains firm at similar levels to 2001 ($1,891/tonne). However, Merlot and Cabernet Sauvignon, both at $2,000/tonne, were the highest priced red wine grapes in the 2002 vintage. Cabernet Franc prices are increasing steadily and reached $1,800/tonne in 2002.
Bulk variety prices remained low and static, averaging $500-$600/tonne in 2003. The frost events and low yields this season, coupled with an appreciating New Zealand dollar, is leading to greater imports of bulk wine and further price pressure on bulk grape prices.
Expenditure
The most significant changes in expenditure for growers from the 2002/03 season have been in frost protection and labour.
Growers brought in helicopters to control the succession of spring frosts that occurred in many areas. This was a very expensive exercise as the advective frosts experienced meant that helicopters could not control them. So, while costs were increased, yields were still significantly reduced.
Extra labour was required to thin and harvest many blocks affected by frost damage and the maturity spread that occurred.
Net Result
Gross returns improved significantly with the improved yield and continuing firm prices experienced for 2002. For premium varieties, such as Sauvignon Blanc, gross returns improved to almost $21,000/ha while bulk varieties improved with higher recorded yields to $9,360/ha.
Table 3 outlines an expected average gross margin for both a premium wine grape grower producing Sauvignon Blanc and a bulk wine grape grower producing Muller Thurgau for 2002. The improved yield in 2002 has significantly improved gross margins for growers and particularly for premium wine grape producers. The price differential in favour of premium varieties is in line with the emphasis by the industry on marketing premium wine on world markets.
Table 3: Annual Gross Margins for Wine Grapes ($/ha)
2002 - Premium Varieties |
2002 - Bulk Varieties |
|||
Income 9.9 t/ha @ $2,150/t |
21,285 |
Income 15.6 t/ha @ $600/t |
9,360 | |
Expenditure: |
Expenditure: |
|||
Pruning @ 70 c/vine |
1,400 |
Pruning @ 20 c/vine (machine) |
400 | |
Sprays/herbicides |
1,210 |
Sprays/herbicides |
1,210 | |
Training/desuckering/shoot thinning |
2,080 |
Training/desuckering/shoot thinning |
1,600 | |
Trimming |
300 |
Trimming |
300 | |
Harvesting @ $70/t |
693 |
Harvesting @ $70/t |
952 | |
Leaf pluck @ 20 c/vine |
400 |
Leaf pluck @ 20 c/vine |
150 | |
Bird control |
340 |
Bird control |
340 | |
Gross margin |
14,862 |
Gross margin |
4,408 |
Source: Clarke Horticultural Consultancy Ltd
Contact for Enquiries
Farm Monitoring Programme Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
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