GROW
Benchmarking 2020 Profits up and outlook ‘cautiously optimistic’ SOPHIE PREECE
MARLBOROUGH GRAPE growers enjoyed a leap in yields and profits for the 2020 season, despite the complications of a Covid-19 harvest. The 2020 Marlborough Vineyard Benchmarking report, which uses a 30-hectare vineyard model, indicates profits of $11,910 per hectare before tax, which is up 37% on 2019 and a 16% increase on the average profit from 2015 to 2019. “The combination of the very dry weather right through harvest and low disease pressure, coupled with adequate irrigation for most vineyards, led to good yields of excellent quality fruit,” says the report, which was commissioned by New Zealand Winegrowers (NZW) and the Ministry for Primary Industries (MPI), and undertaken by Fruition Horticulture. The model yield was 13.8 tonnes per hectare, up 10% on 2019 and 6% on the 2015 to 2019 average, while Sauvignon Blanc yield was 14.9 tonnes per hectare, 6% up on 2019, says the report. “The earlier flowering varieties Pinot Noir, Pinot Gris and Chardonnay rebounded after a poor year in 2019, up between 30% and 80% in comparison with 2019 due to greatly improved weather conditions for flowering and pollination.” Grape prices rose as well, with Sauvignon Blanc up 3% to $1,905 per tonne, which is 6% higher than the 2015 to 2019 average, says the report. “Prices edged higher due to increased sales and high demand for grapes.” Across all varieties, the model average grape price was $2,020 per tonne, up 4% on 2020 and 7% up on the five years previous. Greg Dryden of Fruition Horticulture says great climatic conditions and yield potential outweighed the impact of Covid, which was largely a stress factor that created “a lot of anguish” to begin with, but proved little hindrance once the harvest machines started operating. In fact, the rules around Covid made it easier for some to get on with their work, with no distractions, he says. “People could focus on getting their crop off.” As harvest progressed, new stresses arose as people considered labour shortages for pruning, with borders closed to winter seasonal staff, says Greg. “But as the survey went on that concern dissipated.” He notes that winter
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“Underlying industry confidence however is still positive underpinned by strong demand for Sauvignon Blanc”
pruning costs were higher as a result of that loss of seasonal labour, which will be revealed in the 2021 benchmarking report. Working expenses in the last year increased 2% on 2019, costing the model vineyard $12,455 per hectare, up 15% on the 2015 to 2019 average. Increases over the past five years have mainly been driven by increased wage rates, with the minimum wage increasing 20% between 2015 and 2019, while growers report a consequent increase in other wage rates, says the report. “Pest and disease control costs have also been increasing although fungicide inputs were able to be reduced in 2019/20 due to the very favourable, dry weather conditions.” Marlborough growers continued to invest in capital items during the season, including dams, tractors, machinery and utility vehicles, the report finds. “Some of the machinery purchased is specifically to reduce labour expenses such as three-row sprayers, mechanical pruners and vine strippers.”
Exports up but future uncertain Three quarters of the growers surveyed in the 2020 Marlborough Vineyard Benchmarking survey felt the biggest risk ahead was the potential impact of Covid-19 on global wine markets, including the effect on the distribution chain and the supply-demand balance, says the report. “At present they feel uncertain as to what may happen six to 12 months ahead.” Sauvignon Blanc export sales were up by 6% in June and 23% in July 2020, compared to the same months in 2019, according to New Zealand Winegrowers (NZW) export data. NZW reports that all wineries are facing “increased uncertainty on future sales in a world impacted by Covid-19,” says the report. “But if supermarket sales continue at current levels the signs, overall for the industry, are positive.”
