Industry News
Viticulture benchmarking shows profit down – again TESSA NICHOLSON
FOR THE third year in a row, the profit before tax of the MPI/ NZW Viticulture Benchmarking Marlborough model has shown a marked decrease. The information which is based on data from 50 growers in the region, in a model of 30 producing hectares, shows profit before tax of $8,700 per hectare, which is 13 percent down on last year. In 2018 the profit before tax was $10,000 per hectare. In 2017 it was $11,600 and in 2016 it was $14,820. Greg Dryden from Fruition
s ays t hos e ye ar-on-ye ar decreases are “a worrying trend,” at the vineyard level. What’s most worrying is that the decrease is in spite of average yields and price paid for fruit being relatively stable between 2018 and 2019. The only explanation for the continual decreases is vineyard expenses, which in 2019 reached $12,235 a hectare. “That is up 31 percent over the past 10 years,” Dryden says. “Compared with yields being up just four percent, and prices up 10 percent since 2009.”
Labour makes up around 55 percent of all vineyard expenses, equating to $6,760 per hectare. Increases in the minimal wage that took effect in April 2018 is one reason for the labour cost hike. The second increase came into effect in April this year, and currently sits at $17.70. By 2021 the government aims to raise the adult minimum wage to $20 an hour. Dryden expects those future increases will have a similar impact to vineyard expenses,
as those seen in the past 12 months. Other vineyard expenses to show increases related to pest and disease management – mainly as growers battled against mealybug, controlling powdery mildew and dealing with trunk disease. There were also extra irrigation costs this season, with some growers having to pay for water to be trucked in, once the Wairau River irrigation takes were shut off in February. The Marlborough model is heavily weighted with
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NZ WINEGROWER AUGUST/SEPTEMBER 2019