How do finances stack up for organic growers?
As printed in the current edition of WINEPRESS magazine, here is an abbreviated version of OWNZ coordinator Rebecca Reider's recap of a recent seminar presented by Bart Arnst, Marlborough Organics Consultancy.
Organic wines are more costly to grow than conventional blocks, but deliver a better price per tonne, says organic consultant Bart Arnst. He told audiences at an Organic Winegrowers New Zealand (OWNZ) seminar in Blenheim late last year that organics might cost an extra $400 cost per hectare, due largely to undervine treatments, but returns can be $300 per tonne higher than non-organic. “The majority of organic growers are focused on quality,” he told the group of organic and non-organic growers. “This inevitably increases the per-hectare spend.”
However, he argued that those additional costs are compensated in the price points for high quality wines and grapes. Last season, certified organic Sauvignon Blanc growers in Marlborough received around $300 per tonne above the district average, he said. The total financial picture will depend on yields as well as the cost of vineyard tasks and the price received for fruit, he added. A sample calculation for Marlborough Sauvignon Blanc, based on an average yield of 13.6 tonne/ha for organic vineyards, saw an organic grower earn $3680 per hectare more than they would at the same yield levels for non-organic grapes.
Bart said there were a variety of factors that influence financial bottom lines for organic growers. But, in general, pruning and bud rubbing costs are unlikely to change when a vineyard is converted to organic production. “Reduction of vigour reduces speed in accessing the appropriate wood. This in turn however should make the stripping out process quicker and supposedly cheaper.” Trimming and leaf removal costs tend to be similar in organic and non-organic regimes, with the exception of blocks that have had excess vigour in the past, and may need one less pass under organic management. Mowing costs are also likely to remain constant, although mowing practices are species-dependent, and sward management can change under organic production, he said.
While the majority of non-organic vineyards have tightened their spray intervals to be in line with the standard organic regime, an organic canopy spray programme can be between $200-$400/ha cheaper, due to the difference in costs between organic and synthetic chemicals, he said.
Fertiliser costs are unlikely to vary much between organic and non-organic vineyards. “In a quick survey, both organic and non-organic seem to be averaging around $350/ha per year on solid fertiliser.”
When it comes to undervine treatments, Bart estimated the total cost per season was approximately $500/ha extra for undervine cultivation, compared with herbicide treatment. However, the current approach to undervine herbicide is a liability for the wine industry, he said, adding that consumers and the weeds themselves were becoming increasingly resistant. Sub-surface irrigation could be a “game changer” in reducing the cost of weeding, he added. “Half the problem we’re facing is we’re watering the weeds we’re trying to eliminate.”
When it comes to yields and profitability, Bart pointed out that there can be some benefits to reducing excess vigour by becoming organic. With lower crop loads, ripening is faster, which can lessen losses to botrytis; and money doesn’t have to be spent on the task of dropping fruit. Going organic is often about the difference between being “a short game player vs. a long game player,” Bart said. “Those looking to be in this business for a long time have a different approach.”
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*For the extended recap of Bart's presentation (co presented by Rob Simcic of ANZ Bank), please check out Rebecca's article in the summer edition 2018/19 of our OWNZ magazine Organic Matters, page 11.