Economics of Growing Wine Grapes

Production Costs

• Vineyard costs fall into two categories: installation and cultivation. Installation costs involve the vines, their planting, the irrigation system, the stakes and trellis system, and basic land preparation. Power, water storage, wells, harvesting, engineering and specialized drainage or erosion control comprise the costs of farming the vineyard. The first crop comes in the third or fourth year after planting. During these years without a harvest, you will incur costs for watering, weeding, fertilizing, pruning and managing pests.

Budgeting

• Draw up financial projections that assess potential risks. The possibility of bad weather and disease is a critical aspect of the risk assessment. Additionally, fluctuating supply and demand factors into pricing and profit projections.

Determining Potential Returns

• Evaluating area wineries' demand for grape varietals clarifies the viability of prospective wine-grape varieties. The Texas Winegrape Association recommends approaching existing wineries to discuss varietal demand, volume and pricing, information critical to an accurate market assessment. Conduct a wine-market analysis if your grape production plans contain an onsite winery.