The Viticultural Monitoring Report, conducted by Fruition Horticulture and funded by NZWinegrowers draws on information from 18 growers in the Marlborough region and 15 in Hawke’s Bay. The information is collated into regional individual ‘model’ vineyards, with the Marlborough model being 30 producing hectares, and Hawke’s Bay being 12.5 hectares.
Marlborough
Sauvignon Blanc makes up 77% of the producing area, followed by Pinot Noir, Chardonnay, Pinot Gris and Riesling. As for most regions Marlborough’s 2013 vintage was a vast improvement on the previous year. Yields increased 26% when compared with the lower than average yields of 2012, thanks to near perfect conditions at flowering.
Tonnages per hectare rose from 9.7 tonnes in 2012, to 12.2 tonnes this year, far higher than most growers had predicted. However there was a decided difference between the sub regions, with the Awatere growers showing far lower yields overall, when compared with their Wairau compatriots.
“In the vineyard model, Sauvignon Blanc yielded 13.1 tonnes per hectare, on average up 21% on the previous year and 9% up on the 2008-12 average,” the report states. “On the monitored vineyard, yields for Sauvignon Blanc ranged from 8.1 tonnes (Awatere) to 19.6 tonnes per hectare. The Wairau growers produced yields of Sauvignon Blanc 41% higher than the Awatere growers.”
Which indicates that if the Awatere hadn’t suffered a cooler flowering period, the total tonnages for Marlborough could have been far higher than the eventual 251,850 tonnes. (The Awatere makes up 29% of Marlborough’s total vineyard area, according to the last figures provided by the Marlborough District Council in 2011.)
Alongside the higher yields, the price being paid for fruit also saw a dramatic increase rising 22% across all varieties, to $1720 per tonne. Sauvignon Blanc prices rose 22% to $1603, while Pinot Noir rose 11% to $3024. Growers had not predicted such an increase, calculating any rise would be around the 6% figure when asked last year. However they are not expecting those prices to continue rising next year.
“The improved yields in Marlborough in 2013 have limited growers’ expectations
to a minimal price increase across all varieties in 2013/14, as supply catches back up to demand.”
With high yields and an increase in grape prices, the net cash income for Marlborough has also risen – by 53% when compared with last year. The net cash income this year was $625,800, or $20,860 per hectare. This has led to a substantial increase in vineyard profit before tax, by 220% over the 2012/13 season, to $9800 per hectare. While moving in the right direction, that profit is still way below the high of 2008, when growers recorded a profit before tax of $14,970.
In terms of costs, nearly every one of the 18 growers involved stated there was no fat left to cut in terms of vineyard expenditure. Repairs and maintenance have been placed on the back burner for a number of years now, as has fertiliser applications. However both these areas are now being spent on, with fertiliser costs rising substantially in the past 12 months.
“However the $200 per hectare for fertiliser is still $229 per hectare less than the 2008/09 season.”
Optimism in the future of the wine industry has seen a change in attitude to future development as well. Several growers in the survey indicated they were looking to purchase addition vineyard area in an effort to increase economics of scale, while other growers are looking at further development.
“Development increased from zero in 2011/12 to $17,000 in 2012/13, due to two growers in the survey planting new areas on their properties. More development is planned for the model with a lesser amount in 2014, but higher again in 2015 when plants are ready. Development plans also tended to be into new land, rather than replanting existing vineyards.”
And growers are not planning to cut back on yields, if their plans for pruning are anything to go by. Those that had moved from two or three canes to four canes last year, to counter the chances of a second year of low yields, say they are sticking with four canes again this year. That is expected to see yields in 2014 rise yet again, if weather conditions are favourable at flowering.
Moving forward the morale and business viability appears to be on the rise.
“A particular factor is that the improvement is based on increased grape demand, not just one good growing season. As a result, the majority of growers felt positive or cautiously optimistic about their business.”
Hawke’s Bay
There is also cautious optimism within the growers surveyed in Hawke’s Bay. After three years of negative returns, this season has seen vineyard profit restored.
The favourable weather conditions helped produce a vintage that many claim is one of the best ever, although the drought did cause issues in terms of irrigation bans.
“A number of growers faced irrigation bans of up to 28 days during the ripening period, causing some reduction in yield in those affected areas,” the report says. “On other vineyards with high crop volumes, fruit struggled to reach target brix because the vines were water stressed, but flavour profiles were still achieved.”
What a difference to the 2011/12 season, especially in terms of profit.
The Hawke’s Bay model achieved a cash-operating surplus of $86,500 which is a staggering 1230% greater than the $6500 surplus achieved in 2011/12.
“Although this season has seen vineyard profit restored after three years of negative returns, growers remain cautious. They see this season as a reprieve and hope for another ‘normal’ season to aid in the financial recovery.”
Merlot is the dominant variety within the Hawke’s Bay model, making up 24% of the producing area, followed by Sauvignon Blanc, Chardonnay, Pinot Gris, Syrah and other reds. Over all varieties, yields increased by 20%, with an average of 8.2 tonnes per hectare this last season, compared with 6.8 tonnes in the previous year.
Syrah yields increased 104% to 10.2 tonnes with Merlot up 37.5% to 9.9 tonnes and Pinot Gris up 73% to 10.4 tonnes. Sauvignon Blanc yields remained stable at 7.2 tonnes per hectare, although there is potential for this to increase once the vines gain some age.
In terms of prices, all varieties saw increases, with a weighted average price of $1680, up $505 on last season. That is the highest level paid for fruit since the 2008/09 season. It was Chardonnay that had the greatest increase, reflecting the growing demand for this variety and the outstanding quality of the fruit. The average price was $1890 per tonne, 29% more than last year.
Merlot prices rose to $1770 a tonne, up $495 on last year. The average price for Syrah rose by $180 per tonne, although some vineyards did not reach target brix due to high crop loads coupled with water restrictions.
Growers did well to drop expenses by 8% this last season, spending an average of $6856 per hectare. The perfect weather conditions certainly helped, decreasing the disease pressure, need for sprays, mowing, weed and pest control. However electricity costs rose, due to the increased need for irrigation. Frost protection costs also rose by 200% with up to 13 frost events reported in the 2012/13 season.
Overall the report states that this season has been a bright contrast to the difficult 2012/13 season, which for many growers was their worst ever.
“Although this has been the most positive vintage in four years, growers remain cautious.
They realise they need more than one season to bring their businesses back to sustainable viability.”
If there is one major concern, it remains
the profitability of the industry moving forward.
“Growers are still facing challenges with price-setting occurring too late in the
season and cash flow issues
from being drip fed grape payments throughout the year. Growers feel current contract payment schedules have growers ‘banking’ the wineries with
drip fed payments impairing cash flow.
“They also think that the costs of growing grapes have outweighed the price received for too many years and that wineries
seem to expect growers to increase inputs
to achieve higher quality parameters
without a commensurate increase in grape prices.” ν
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