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Title: Grape production in Florida. The current marketing environment.
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Title: Grape production in Florida. The current marketing environment.
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    Front Cover
        Front cover
    Title Page
        Title page
    Summary
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        Page ii
    Main
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O0

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Staff Report
















FLORIDA

AGRICULTURAL MARKET RESEARCH CENTER

FOOD AND RESOURCE ECONOMICS DEPARTMENT
Institute of Food and Agricultural Sciences
University of Florida
'Gainesville, Florida 32611


HUME LIBRARY
MAR 6 1981

I.F.A.S. Univ. of Forida




















GRAPE PRODUCTION IN FLORIDA
THE CURRENT MARKETING ENVIRONMENT

By

Kary Mathis
Robert L. Degner


Staff Report 3


November 1977


Staff Papers are circulated without formal review
by the Food and Resource Economics Department.
Content is the sole responsibility of the author.



Food and Resource Economics Department
Institute of Food and Agricultural Sciences
University of Florida, Gainesville, Florida 32611










Summary

Grape Production in Florida

An estimated 300-400 acres are in grapes in Florida, nearly all
in small plantings. Most are either muscadine or bunch grapes, yielding
4 to 6 tons per acre in larger commercial plantings. Both varieties
are best suited for fresh use, but are also suitable for some wine and
juice production.

Enterprise budgets and establishment costs for Florida were reported
in 1970 and are being updated. Costs from other states are available,
but are not directly comparable.

United States Production Trends


Grapes are an important fruit crop in the U.S., with California pro-
ducing about 90 percent of U.S. output. New York, Washington and
Pennsylvania are other important producers.

Major grape types are: Concord and other American types, used for
juice and jellies, with some to wine; Thompson seedless, produced for
raisins but also suited for fresh and wine use; wine grapes, used mainly
for wine, but with some sold fresh.

Over 60 percent of U.S. grapes are used for wine. Wine consumption
increased sharply from 1969 to 1973 while grape production was reduced
and prices climbed rapidly. Tremendous expansion in wine grape plantings
resulted.
California acreage is now stable, but wine grape production will
continue increasing until 1980. Raisin and table grape production is
stable.

Of 583 bonded wineries in the U.S., 345 are in California, with
only 4 in Florida, one in Georgia, and two in South Carolina.

Grape Consumption and Demand -- U.S.

Prospects are favorable for increased wine consumption, but not at
the high rate of 1969-73. Per capital consumption of table grapes and
raisins is stable after declining for several years, and is expected
to grow slowly, if at all.










Grape Consumption and Demand -- Florida


Since no per capital consumption figures are reported for Florida,
it is assumed here that Florida residents consume the same amounts
of grapes and grape products other than wine as the average for the U.S.

Per capital wine consumption in Florida is 1.85 gallons, compared
with 0.83 in Alabama and 5.00 in the District of Columbia.

If Florida-grown grapes could take 30 percent of Florida summer fresh
grape consumption, potential volume would utilize production from about
400 acres.


Market Prospects

Florida grapes are currently sold through local retailers, in roadside
or farmer's markets, and through "pick-your-own" arrangements.

U.S. supplies of table grapes are stable, and about balanced with
demand. Relatively small, steady growth in consumption is likely.

Florida grape growers entering the modern mass distribution system
for fresh produce would need to meet the requirements of that system to
take markets away from current grape suppliers or attempt to increase
grape consumption.

Research and Information Needs


A commercial grape industry in Florida would probably require additional
research on varieties, cultural practices, processing methods and several
other related factors. Research and education needs in these areas should
be delineated by growers, fruit crops specialists, and foood scientists.

Enterprise budgets, establishment costs and related analyses of the
economics of grape production are being prepared.

Objective evaluation of Florida varieties and products would be necessary,
with trained taste panels, consumer panels, in-store tests and other market
research methods.
Current Florida tax laws affecting wineries and other food processing
opportunities should be investigated.

Basic data on acreage, production, prices and utilization be
collected on a continuing basis.












GRAPE PRODUCTION IN FLORIDA:
THE CURRENT MARKETING ENVIRONMENT

Kary Mathis and Robert L. Degner


Introduction

This report was prepared in response to requests from grape growers,
IFAS personnel and State government officials interested in the market
potential for grapes in Florida. The report provides a brief review of
the situation and trends in grape production and consumption, and outlines
information needed for in-depth analysis of production and market poten-
tial in Florida. This report surveys key economic factors affecting grape
marketing and production.


Grape Production in Florida


Cultivated grape acreage in Florida,until recently, have been limited
to a very few commercial operations, and home or dooryard plantings scatter-
ed throughout the state. With so few commercial plantings and such a small
acreage, no data on acreage, planting, removal, production, etc., have
been collected by the government agencies responsible for agricultural
statistics.
Current estimates by knowledgeable persons place Florida grape area
at 300 to 400 acres. Muscadine and bunch grapes are the major types, with
several varieties of each. No information on acreage in each type is
currently available.
Muscadine or bunch grapes may yield as much as eight tons per acre,
but three to six tons is the likely yield in larger commercial plantings.
Grapes harvested for wine or juice will yield the higher amounts, while
fresh market yields may be two and one-half to three tons.


KARY MATHIS is associate professor and ROBERT L. DEGNER is assistant
professor of food and resource economics, University of Florida.







Florida-grown grapes have a relatively short season of about one month
for each type. Bunch grapes normally ripen from the last week of June
through the third week of July. Muscadines are typically harvested during
the month of August.
A 1970 study presented enterprise budgets, establishment costs and
other requirements for muscadine and bunch grape vineyards in Florida
(Hart and Polopolus). Costs have increased so much since then that later
information will be necessary to analyze returns and profitability. Establish-
ment and production costs are published for vineyards in California, Washington,
New York and New Mexico (Baritelle; Washington State University, 1974; Good
and Jordan; Clevenger, Haider and Patrick). However, those publications in-
clude costs for varieties produced in each of the states listed, under
conditions there. The enterprise budgets from other states (see Appendix)
may be useful as guides for estimating costs and returns in Florida but
should not be applied directly to Florida operations. Enterprise budgets
for Florida grape production are being prepared by IFAS personnel.
Establishment and cultural practices for Florida conditions are covered
in several sources (Crocker and Mortensen; Ison; Mortensen, Adlerz and
Hopkins) and will not be discussed here. Other authorities stress the
importance of having sufficient knowledge to grow and manage a vineyard
(Baritelle), and that management is often the difference between successful
and unsuccessful operations (Good and Jordan).

United States Production Trends

Grapes have been among the three leading fruit crops in cash receipts
from farm marketing for a number of years (Table 1). Total production
in the U.S. and in California, the dominant state, has increased substantially
since the mid-1930's (Table 2). California production has made up around
90 percent or more of U. S. output for the past several years (Table 3).
New York is a distant second, with Washington and Pennsylvania producing
sizeable amounts. The only Southeastern states with production large
enough to be reported annually by USDA are North Carolina and Georgia-South
Carolina (reported together).









Table l.--Cash receipts from marketing, leading fruit crops, U. S.

Year Oranges Apples Grapes

-------------------million dollars------------------

1965 491 269 195
1966. 329 258 205
1967 358 280 213
1968 384 332 235
1969 470 313 282
1970 404 278 297
1971 520 310 372
1972 556 340 421
1973 618 475 672
1974 633 537 584
1975 691 498 618
1976 700 424 596
Source: State Farm Income Statistics, ERS, USDA.

Grapes are a very versatile crop. Concord and other American type
varieties, the principal types in New York, are used mainly in juice and
jellies. Washington, Pennsylvania and Michigan also have substantial
production of Concord and American varieties, with sizable tonnages going
into wine in recent years (Baritelle and Folwell, 1975).
The principal raisin grape is the Thompson seedless variety grown in
California. The Thompson is also well suited for making wine and is a
desirable table grape. Raisin and table grapes are substituted for wine
types when production of wine grapes is low. Wine grapes are grown pri-
marily for wine production, although some are sold in the fresh market.
Well over half of all grapes produced in the U. S. in recent years has been
into wine production (Table 4).
Wine marketing in the U. S. have increased sharply since 1969,
growing by over 78 percent from 1969 through 1976 (Table 5). This "wine
boom" was due to a dramatic increase in per capital consumption beginning
in 1969. At the same time demand for wine was increasing, grape crops
were short for several years due to unfavorable weather (Baritelle and
Folwell, 1975). The 1970 crop was below the preceding year's, and the
1972 crop was extremely short (Table 4).
The combination of reduced supplies and expanding demand pushed
grower prices to record highs, particularly in California. High prices
and exuberant publicity led to a general wave of optimism, with enormous
expansion in wine grape plantings. California plantings increased from







Table 2.--Trend in grape production, United States and California, 1935-1975

Item Annual Average for -_-
1935-39 1945-49 1950-54 1955-59 1960-64 1965-69 1970-74 1975

-------------------------------1,000 fresh tons--------------------------

United States 2,444 2,941 2,893 2,982 3,283 3,714 3,615 4,283

Other States 220 181 211 237 222 332 367 433

California 2,224 2,760 2,682 2,745 3,061 3,382 3,248 3,850

Raisin varieties 1,270 1,592 1,512 1,632 1,945 2,133 1,981 2,000

Table varieties 392 572 582 540 544 556 430 500

Wine varieties 560 596 588 573 572 693 8371 1,350

California as percent
of total 91 94 93 92 93 91 90 90

Average was 645,000 tons for 1970-72 and 1,125,000 tons for 1973-74.
Source: Clevenger, Haider and Patrick.





-5-


Table 3.--Grape production in major states, 1974-1977

Production
State 1974 1975 1976 1977
--------------------Tons---------------- ------

California 3,787,000 3,961,000 3,890,000 4,000,000
New York 177,000 153,000 183,000 92,000
Washington 80,500 110,200 111,000 100,000
Pennsylvania 53,000 48,000 58,000 30,000

Georgia S.C. 4,900 4,800 4,950 4,900
North Carolina 3,100 4,400 4,500 4,620

Other major states1 86,000 97,350 50,900 57,200

U. S. 4,191,500 4,378,750 4,304,430 4,288,720


New Jersey, Ohio, Michigan, Missouri, Arkansas, Arizona.

Source: Fruit Situation, ERS, USDA.


Table 4.--Production and utilization of grapes, United States, 1965-74

Utilization1
Yer Utilized Processed
pro- Fresh Crushed for
duction Canned Dried wine, juice, etc.

----------------------------1,000 tons----------------------

1965 4,326.0 599.6 54.8 1,297.0 2,374.6
1966 3,733.3 597.4 62.0 1,185.7 1,888.3
1967 3,962.2 466.8 54.0 751.8 1,789.6
1968 3,549.0 558.0 64.0 1,111.1 1,816.0
1969 3,897.5 562.0 66.3 1.010.2 2,259.0
1970 3,119.3 406.0 53.7 821.8 1,837.8
1971 3,996.7 409.9 58.4 880.9 2,647.5
1972 2,569.7 349.6 50.5 437.4 1,732.2
1973 4,193.2 400.6 59.0 969.3 2,764.2
1974 4,377.5 427.2 61.2 1,023.8 2,669.3
1975 4,377.5 510.6 52.7 1,252.4 2,561.8
1976 4,022.1 452.6 48.0 948.5 2,573.0

1May not sum to total due to rounding.
Source: Baritelle and Folwell, 1975; Fruit Situation, ERS, USDA.









Table 5.--Wine marketing in the U. S. and percentage share by origin,
1965, 1969-75

Origin
Year Total Marketings Oi
California Other States Foreign

1,000,000 gallons --------------percent-----------

1965 190 75.3 16.1 8.6
1969 211 72.9 16.7 10.5
1970 267 73.1 15.7 11.2
1971 305 73.7 14.5 11.8
1972 337 70.3 15.7 14.0
1973 347 69.3 14.8 15.9
1974 349 70.7 14.6 14.7
1975 368 73.4 13.2 13.4
1976 376 71.6 12.7 15.7
Source: Wines & Vines, May 1977.


6,130 acres in 1968 to 67,059 acres in 1973, virtually all in wine-type
grapes. Total grape acreage in California in 1974 was 648,847, a 63
percent increase over 1965 acreage. Grape plantings also increased sub-
stantially in Washington, with some increases in Pennsylvania and New York
in the 1969-74 period (Baritelle and Folwell, 1975),
Recent reports show that California acreage has stabilized at about
630,000 acres in 1977, with virtually no planting,and acreage removals
below levels of 1975 and 1976, when price declines caused many growers to
pull out vines (Moulton). Since newer plantings are generally more pro-
ductive than old vines, and acreage removed has been in older or less-
productive areas, total grape production in California and other major
states will continue to grow.
The rate of increase in the next few years is not likely to be as
sharp as that from 1969 to 1974, and supplies of raisin and table grapes
are expected to be relatively stable. Wine grape production potential
particularly in California, will continue to increase as vineyards mature,
and is expected to reach a peak in 1980 (Moulton).






-7-


California dominates U. S. wine
of the total through 1974 (Table 6).
more than all other states combined.
16 percent of wine marketing in the


production, with about 85 percent
New York produces 8 to 10 percent,
Foreign wines account for 13 to
U. S. (Table 5).


Table 6.--Total U. S. gross wine production and percentage share, selected
states, 1960, 1965, 1970-74

Gross U. S. Wine Share produced by:
Year Production California New York Other states

1,000,000 gallons ---------------percent---------------

1960 167 84.7 6.8 8.5
1965 220 85.9 6.6 7.5
1970 256 82.7 9.4 7.9
1971 362 84.8 8.4 6.8
1972 318 82.7 10.0 7.3
1973 418 86.4 8.3 5.3
1974 376 85.6 9.7 4.7

Source: Clevenger, Haider and Patrick, and Wines & Vines.


The latest available survey of bonded wineries shows 583 in the U, S,
in 1976, with California having by far the largest number (Table 7), Florida
has four bonded wineries, with one each in Georgia and two in South Carolina.
Storage capacity in Southeastern wineries is quite small compared with
California firms. A 1976 report on the 100 largest wineries in the U. S.
showed nine of the top 10 in California (Table 8). The South Carolina
wineries ranked 52nd and 86th in storage capacity while the Georgia winery
ranked 66th. None of the four Florida wineries had large enough storage
capacity to rank in the 100 largest in the nation.

Grape Consumption and Demand -- U, S,

As stated earlier, more than half of U. S. grape production is used
to make wine. Per capital consumption of fresh table grapes and raisins
may be stabilizing after a downward trend, while wine consumption has been
increasing since the late 1960's (Table 9).









Table 7.--Bonded wineries, selected states, 1975 and 1976

Wineries
State 1975 1976

California 32 345
New York 38 37
Ohio 32 32
Oregon 15 17
New Jersey 15 15
Pennsylvania 13 15
Michigan 10 15
Missouri 13 14
Iowa 12 13
Arkansas 10 11
Wisconsin 11 10

Florida 4 4
Georgia 1 1
South Carolina 1 2

United States 546 583

Source: Wines & Vines, May 1977. 1

Table 8.--Ten largest wineries, U. S. and largest Southeastern wineries,
with storage capacity and number of plants, 1976

Total storage
Rank Firm State capacity Plants


1,000 gallons


Number


1 E & J Gallo
2 United Vintners
3 Guild Wineries &
Distilleries
4 Vie Del Co.'
5 Bear Mt. Winery
6 Taylor Wine Co.
7 Franzia Bros.
Winery
8 Paul Masson
Vineyards
9 The Christian Bros
10 Almaden Vineyards


52 Tenner Eros.


California
11

I"
"I
New York

California
"I
"I
I"


South Carolina


Monarch Georgia
Oakview Plantations South Carolina


Source: Wines & Vines, May 1977.


226,000
95,000

57,000
36,000
32,000
31,367

28,300

28,000
27,483
26,700


2,000

1,200
520









Table 9.--United States per capital consumption of grapes and grape products,
1965-7

Fresh Canned
YearGrapes Raisins Grape Juice! Wine

------------------pounds--------------- gallons-

1965 3.9 1.54 .74 .98
1966 3.8 1.64 .63 .98
1967 3.1 1.52 .67 1.03
1968 3.4 1.44 .55 1.07
1969 3.1 1.47 .54 1,17
1970 2.5 1.34 .58 1.31
1971 2.1 1.35 .70 1.48
1972 1.8 .96 .54 1,61
1973 2.1 1.40 .56 1.65
1974 2.3 1.35 .67 1.65
1975 2.5 1.38 .57 1.65
1976 n.a. n.a. n.a. 1.73

Product weight basis.
Source: Baritelle and Folwell, 1975.


The quantity of wine consumed increased sharply from 1969 through 1973,
despite rising price levels. The sudden increase in wine demand is attributed
to several factors: Increasing numbers of people with college educations,
more people legal drinking age, higher incomes, increased travel and new
wine products.
Prospects for increased wine consumption are relatively favorable,
since present U. S. per capital consumption of 1.73 gallons is far below
levels in several Western European countries. A recent study determined that
10 percent of U. S. households account for 45 percent of all wine purchases.
About two-thirds of wine purchases are made by 20 percent of the households
purchasing wine.
Households with the highest amount of wine purchases are those with
a high level of education and income, where the head has a white collar
occupation and the family owns their own home (Washington State University,
1975). In addition, this same study reported that wine purchases by whites
far exceeded those by other races. This study noted that the current wine
market in the U. S. is only a very minor segment of the potential.




-10-


Grape Consumption and Demand -- Florida


No recent information is available on per capital or total consumption
of fresh table grapes, raisins, grape juices and jellies or other products
(excluding wine) in Florida. It is assumed in this report that Florida
residents consume the same amounts of those products as the U. S. average.
Wine consumption, in Florida is well above that in other Southeastern
states, but far below per capital levels in other regions of the country.
Estimates for 1976 show Florida with over 1.8 gallons per capital, about
a gallon more than in Georgia and Alabama (Table 10). As a region, the
western states of California, Oregon, Washington, and Nevada have the
highest per capital consumption and New York and other northeastern states
also show high levels (Table 10).
Current Florida consumption of grapes and grape products is estimated
in Table 11. With a population estimated at 8,680,000 in 1977, total
grape and product use is fairly large. Over 95 percent of Florida's people
live in 24 urban counties, so markets for grapes would be expected to be
greatest in and near those areas.
Grape varieties adapted in Florida appear to be best suited for fresh
markets with some possible use in wine or juice (Crocker and Mortensen).
The muscadine and bunch varieties produced in Florida mature in the summer.
Estimating potential markets for Florida-produced fresh table grapes
requires several assumptions, since no reliable data are available on
per capital consumption by type, as stated above.
Per capital consumption of fresh table grapes in the U.S. in 1975
was 2.3 pounds (USDA, ERS, 1977). About 41 percent of that consumption
takes place during the summer quarter (USDA, ARS). Results from test
marketing of muscadines in North Carolina showed that they comprised
about 10 percent of retail sales.
These data, though sketchy, are the best available. Estimates of
potential market volumes based on these data and assumptions should be
viewed with caution. However, an estimate of potential fresh market
volume for Florida-grown grapes gives:





-11-


2.3 Ibs. (U.S. per capital consumption) X 41% (Summer consumption) =
.94 Ibs. X 10% (Florida grape share) = .094 Ibs X 8,680,000 (Florida
population, 1977) 2,000 = 409 tons potential Florida volume.


If an average yield of 3 tons per acre for fresh market use is assumed,
then:
409 tons 3 = 136 acres potential Florida production.

If Florida-grown grapes should take a 30 percent share of the summer
fresh grape market for the entire state, then potential volume would be
1,228 tons, from 409 acres.
Additional production could possibly be used in juice and wine, if
processing facilities were available and satisfactory arrangements could
be made between growers and processors. The 1970 study referred to earlier
discussed possible use of citrus processing plants for grape juice in the
summer (Hart and Polopolus).


Market Prospects


From information available now, it seems that most Florida grapes
marketed are sold for fresh use in roadside or farmers' markets, to local
retailers or through "pick-your-own" arrangements. Increased Florida
production would have to compete with other table grapes from the South-
east and California.
Presently, table grape production in California and other major
growing areas is about stable, and balanced with consumer demand. If
American consumers have reversed the downward trend in fresh grape
consumption, then population growth, plus any increase in per capital use
would absorb a gradual increase in fresh grape supplies. Long-term
market projections for grapes are subject to considerable risk, since the
flexibility of shifting between the three major uses for grapes is open
to producers in the leading states.
Florida grape growers should be fully aware of several important
factors affecting their entry into the fresh fruit marketing system. The
largest volumes of produce are moved through the wholesale-retail mass
distribution system. Supermarkets receive most produce through a central







Table 10.--Wine consumption in selected states, 1976, and projected to 1980 and 1990

1976 Consumption Projected Consumption
State Per capital Total 1980 1990
Per capital Total Per capital Total
gallons 1000 gal. gallons 1000 gal. gallons 1000 gal.

Florida 1.851 16,610 2.121 17,391 2.961 29,355
Alabama 0.834 2,926 0.628 2,361 0.910 3,800
Georgia 0.871 N.A. 1.067 5,695 1.575 9,812
North Carolina 1.229 N.A. 1.293 7,388 1.896 12,914
South Carolina 1.118 2,997 1.180 3,439 1.735 5,689

District of Columbia 5.001 3,597 6.631 5,020 8.942 6,769
Nevada 4.324 2,759 4.283 2,874 5.868 5,334
California 3.732 81,619 4.609 111,764 6.278 184,252
Oregon 2.860 6,320 3.249 7,934 4.886 13,653
Washington 2.452 9,390 3.219 12,582 4.708 21,274
Vermont 2.457 1,250 2.859 1,466 4.102 2,404
Rhode Island 2.452 2,391 2.602 2,826 3.744 4,642
New York 2.423 43,349 2.392 50,032 2.973 70,912

Source: Washington State University, 1974 and Wines & Vines, May 1977.





-13-


distribution point, which purchases from growers or terminal markets.
Retailers require large volumes, available consistently in acceptable
quality throughout the year. Individual produce items are handled in
season, and retailers prefer to deal with the same group of suppliers
from one producing area during that particular season.
A supermarket chain typically supplies 80 to 100 stores from one
distribution facility. The produce buyer for this group of stores will
purchase fresh fruit and vegetable needs in truckload or multiple-load
lots.. Recent data on supermarket produce sales show the typical store,
sells 150 pounds of table grapes weekly. Thus, average or typical
volume for one distribution center would require 7.5 tons of grapes each
week. This volume may double or triple if grapes are featured, or offer-
ed at special prices.
Increased Florida production might be able to supply such a market.
Florida growers might be able to move fresh.grapes to Southeastern markets
early in the season, at favorable prices. Consumer preferences currently
seem to be for seedless grapes, though seeded varieties are also used.
Retailers and consumers are accustomed to high quality fresh grapes of
any variety. Producing for this market requires particular care and
management in growing, harvesting and packing. Costs are thus higher
than for processing grapes. Of course, potential returns are often
higher for fresh fruit, as well.
If many small growers are attempting to sell grapes to a few
larger retailers, the growers would be well advised to consider a coopera-
tive or other group marketing organization. Growers selling individually
would generally be limited to the outlets mentioned earlier: pick-your-
own sales, roadside stands, or independent local retailers. If process-
ing markets for wine or juice were available, growers might have secondary
outlets there.
Research and Information Needs


Development of a viable grape industry in Florida would require the
cooperation of commercial grape growers and a coordinated research effort
by several IFAS units. The Agricultural Research Center in Leesburg and
the Fruit Crops Department have made significant advances with respect to





-14-


varietal developments and cultural practices, but further work could
possibly increase the likelihood of success for grapes. Similarly, the
Food Science Department has explored the utilization of Florida grape
varieties for wines.
Presently, interest has been expressed by Florida grape growers
for research on grapes for (1) fresh consumption, particularly for sales
through retail food stores; (2) concentrate fresh juice; (3) bakery pro-
ducts and (4) improved wines. As potentially suitable varieties and hand-
ling and processing techniques may be developed, the following areas would
need to be investigated thoroughly to assess the market potential for
Florida grown grapes:
A. Production costs and returns must be ascertained which
reflect Florida growing conditions, currently marketing
practices and sizes of operations. This work is currently
under way.
B. Grape varieties for fresh utilization and products developed
by IFAS research must be evaluated objectively using appro-
priate market research techniques in order to estimate the
potential market share obtainable for Florida-grown grapes.
Preliminary evaluations can usually be obtained through
trained taste panels, but ultimately more valid results can
be obtained through consumer panels and in-store marketing
experiments which will require substantial research effort.
C. At the time of the 1970 report Florida tax laws provided for
favorable treatment of Florida-grown products used in alcohol
fermentation. In 1970, the tax imposed on alcohol produced in
Florida with Florida materials was $.47 per proof gallon, while
state tax on alcohol shipped into the state or produced here
with out-of-state raw materials was $3.75 per proof gallon.
If the state's laws still provide for such treatment, Florida
grapes could be attractive to wineries or distilleries.
D. If the Florida grape industry expands, collection of statisti-
cal data should be explored. Precise trends and projections
are not currently possible because acreage, production, price,
or utilization data are not available.













APPENDIX

The following tables indicate typical costs and returns from
various grape enterprises in major grape growing areas of the U. S.
They are presented here only as a guide. Grape production in North
Florida would entail different costs and returns depending on indi-
vidual management practices and the type of market outlet utilized,
i.e., u-pick operations, farmers' markets, sale to retail stores, or
sale for processing into juice or wine.






-16-


Table 13--Summary of annual per acre establishment and production costs'
for a 25-acre Concord and Vinifera Vineyard1 (Washington), 1973



Years
1 2 3 4 5


SLand Preparation
Leveling, planting, etc.
Survey & staking

Sub Total

Plants & Planting
Plants 545 @ $.50
Planting @ $.05

Sub Total-2

RLeplanting

Total Land Prep. & Plant. Costs

Trellis Installation.
End posts & anchors
Line-posts 167
Wire 1250 ft.
Cross arta 174
Labor @ $2.50/hr.

Sub Total

Trellis Repair

Total Trellis Costs

Cultural Practices
Prune & train
Fertilize
Insect & disease control
Hand hoe
Cultivation & veed control
Cover crop-
How sod & prunings

Sub Total

Irrigation Operation & Kaintenance

Total Cultural Practices & Irrigation
Harves t
.picking (hand) @ $22/Ton
Picking (machine) @ $20/Ton
Bauling e $3/Ton

Sub Total

Overhead
Taxes
Uater & electricity
Office & accounting
S Kanagesaent

Sub Total

Total'Production Costs


35.00
21.40

56.40


272:50
27.25

299.75


27.04

356.15 27.04


26.40



7.50

33.90


180.69
116.86
150.61
189.35

637.51


33.90 637.51


10.00
11.00
S5.00
35.00
34.00
7.90


102.90

14.00

116.90








10.00
15.00
18.89
41.67

85.56

592.51


95;68
14.14
5.20
10.40
35.36
82.16


169.00

14.56

183.56








10.40
15.60
19.65
43.34

88.98

937.09


14.61

14.61


15.45

15.45


86.56
11.90
4.11
6.49
35.71
8.55
10.63

153.32

15.15

168.47

35.71

4.87

40.58


10.82
16.23
20.44
45.09

92.58

316.24


126.00
17.44
4.28
5.63
32.63
8.89
10.46

205.31

15.75

221.06

74.25

10.13

84.38


11.25
16.88
21.25
46.88

96.26

401.70


116.42
18.13
4.45

10.53
9.24
10.88

169.65

16.38

186.03


117.00
17.55

134.55'


46.80
17.55
22.10
48.78

146.91

482.94







-17-


Tablel3.--Summary of annual per acre establishment an production costs
for a 25-acre Concord and Vinifera Vineyard -Continued.


Years
1 2 3 1.

lovestment
Land 8 $800 888.89
Irrigation system 700.00
Kachine & Building 431.56 27.74 197.60

Total Investment Costs 2,020.45 27.74 197.60

CBAND TOTAL (Prod. Costs & Invest.) 2,612.96 964.83 316.24 401.70 680.54

ACCUHULATED TOTAL COSTS 2,612.96 3,577.79 3,894..04 4,295.73 4,976.27

I/ These costs are b.aed on a net acreage of 22.5 acres planted to grapes. All costs
were inflated at an annual rate of 4 percent.

2/ Plants and planting costs are estimated for vinifera only. For Concord, these costs
voul'd be about S195.25.pcr acre.

Source: (Baritelle, 1973-74).




nrl .rr- --p- ~.rrr -"-~-
S..


-18-


Table l4--Wine grapes; Estimated establishment and production costs and returns
per acre in the Mesilla Valley, -New Mexico, 80-acre operation, 1976


Cost Value
per or
Item Unit Quantity Unit Cost


YEAR ONE
Gross receipts
Purchased inputs and
preharvest operations
Fumigate for nematodes
Preplant weed control
Land preparation (chisel,
disc, float, etc.)
Fertilizer (N), applied
Roolings
Planting (hand)
Irrigation water
Labor (irrigation, weed
control, and misc.)
Rabbit control
Miscellaneous
Subtotal


tons


Overhead
Land tax A 1
Building and equipment
Interest
Depreciation
Land charge ($t.700/A, 8%)
Subtotal
Total cost .
Net return to management


YEAR TWO
Gross receipts
Purchased inputs and
preharvest operations
Rootings
Planting (hand)
Stakes (treated) 7-ft
End posts (treated) 8-ft
Stakes posts
Set end posts
Wire, 13 gauge high
tensile (3 wires)
String 3 wires and staple
Fertilizer (N), and
application
Training and suckering
Prune and tie
Tractor operating (irrio-
gation preparation
and weed control)
Irrigation water
Irrigation labor
Rabbit control
Miscellaneous
Subtotal
Overhead
Land tax
Building and equipment
Interest
Deplrecialion


15.00
7.00

7.00 17.50
.15 15.00
.20 96.00
2.50 30.00
12.40

2.50 47.50
8.00
10.00
258.40

5.00 5.00

13.00
33.50
136.00
187.50
445.90
-445.90


tons


no.
hrs
no.
no.
no.
no.

Ibs


Ibs
hrs
hrs


20 .20 4.00
0.5 2.50 1.25
480 .60 288.00
11 2.95 32.45
480 .90 43.20
11 .80 '8.80

240 .25 60.00
30.50

100 .15 15.00'
40 2.50 100.00
5 2.50 12.50


hrs 1.4
A-ft 2.5
hrs 4


Interest on accumulated cost
Land charge ($1,700/A, 8%)
Subtotal
Total cost
Net return to management


7.00 9.80
12.40
2.50 10.00
3.00
10.00
640.90


5.00

13.00
33.00
35.07
136.00
222.67
863.57
-863.57


I Average yield for years 4 to 30.
Improvement or cost of establishment ($1294) depreciated for
27 years.


Cost Value
per or
Item' Units Quantity Unit Cost
VCAR TirJDE


Gross receipts
Purchased inputs and
preharvest operations
Fertilizer (N), material
and application
Mildew control, material
*and application
Pest management and
material
Training and suckering
Prune and tie
Tractor (irrigation pre-
paration and weed
control
Irrigation water
Irrigation labor
Miscellaneous
Subtotal
Harvesting cost (hand)
Overhead
Land tax
Building and equipment
Interest
Depreciation
Interest on accumulated c.
Land charge ($1.700/A, 8
Subtotal
Total production and harvest
Net return to management

MATURE YEARS
Gross receipts
Purchased inputs and
preharvest operations
Fertilizer (N) applied
Nematode treatment
every third year
Mildew control, material
and application
Pest management and
materials
Pruning
Brush disposal
Tractor (irrigation pre-
paration and weed
control)
Irrigation water
Irrigation labor
Miscellaneous
Subtotal
Harvesting cost


tons 4 130.00 520.00


Ibs- 100 .15




hrs 10 2.50
hrs 12 2.50


15.00

12.68

16.00
25.00
30.00


hrs 1.40 7.00 9.80
A-ft 2.50 12.40
hrs 4 2.50 10.00
10.00
140.20
tons 4 .18.00 72.00

5.00

13.00
33.50
ost 104.76
%) 136.00
292.26
ng cost 504.46
15.54


tons 7.71 130.00 1001.00


lbs 100 .15 15.00

A 1/3 36.00 12.00

13.68

30.00
hrs 20 2.50 50.00
3.00


1.40 7.00 9.80
2.50 12.40
4 2.50 10.00
10.00
165.88
7.7 18.00 138.60


Overhead
Land tax 5.00
Building and equipment
Inter st 13.00
Depreciation 33.50
Depreciation on vineyard 47.93
Interest on accumulated cost 5G.94
Land charge ($1.700/A, 8%) 136.00
Suhtotnl 292.37
Total production and harvesting cost 596.85
Net return to management 404.15

Interest charged on 55 percent of establishment cost.

Source: (Clevenger, 1977).






-19-


Table 15.--Typical costs per acre for growing grapes, Great Lakes;Region
New York, 1974

Cost per acre of grapes.
Item Concords French
Single Curtain Double Curtain Hybrid
Single Curtain

Fixed equipment cost $151.66 $151.66 $161.46

Fixed growing cost 287.10 399.69 364.90

Variable growing cost 320.96 376.23 377.68

TOTAL $759.72 $927.58 $904.04

Source: (Good).


Tablel6.--Typical cost per
Region, 1974


ton for growing and harvesting grapes, Great Lakes


Yield Concord* French
Per Acre Single Curtain Double Curtain Hybrid
Single Curtain
- --- dollars per ton - -- - -
2 409.86 482.02
3 283.24 331.35
4 219.93 261.89 256.01
4.5/ 198.83 --
51/ 181.94 215.52 210.81
6 156.62 184.60 180.67
6.51 -- 172.70 --
7 138.53 162.51 159.15
8 -- 145.95
9 133.06
10 -- 122.76


1/ Estimated "typical" yield in the Great Lakes Region in 1974 was 4.5 tons
for single curtain Concord, 5 tohs for French hybrids and 6.5 tons for
Geheva Double Curtain Concords.






-20-


Tablel7.--Costs of developing a typical
Valley*


60-acre vineyard in California's Napa


Years
1 2 3
-- ---Dollars/Acre-----------


Planting Costs .
Fumigation
*Land preparation
Layout, markers
Distribute, set stakes
Heal in, trim vines
Root stocks (545 @ $.65)
Planting vines

Total planting costs

Trellis Costs
* Stakes .(545 @ 5.65)
End posts.(15-8' x 6 1/2" $4)
Set posts 0 S.50
Wire 270 Ibs./ac; 0 5.40
SString, fasten 2 wires

Total trellis costs


$ 500.00
45.00
22.00
47.00
30.00
354.25
37.00

$1,035.25


$354.25
60.00
7.50
108.00
20.00

$549.75


Cultural Costs


Bud covers, bands
Bud wood
Uncover, prune rootings
Cut bands, top, collars
Prune, tie, trim
Dusting material, labor (sulfur
5-6 times)
Irrigation
Water pump and power
Repairs irrigation system
.Cultivation hand hoe

Total cultural costs

Frost Protection Wind Machines
'Frost protection labor
Fuel
Miscellaneous (cash)

Total frost protection wind
machines


$ 176.00
55.00


18.00
12.00
9.00
33.00


$ 303.00



.$ 19.00


$ 19.00


*$ 5.00
28.00
132.00
27.00

13.00
12.00
10.00
9.00
33.00

$269.00.-


$ 5.00
1.00
.25.00


$ 1.00
3.00
10.00
50.00

13.00
10.00
8.00
9.00
33.00

$137.00


$ 5.00
176.00
60.00


$ 31.00 $241.00





-21-

Table 18--Costs of developing a typical 60-acre vineyard in California s Napa
Valley* -- Continued.

Years
1 2 3
S----------Dollars/Acre-----------


Frost Protection Solid Set
Frost protection labor $ 5.00 $ 5.00
Fuel 11.00 11.00
.Miscellaneous (cash) $ 32.00 8.00 11.00

Total frost protection -
solid set $ 32.00 $ 24.00 $ 27.00

Overhead Costs

Property taxes $ 75.00 $ 75.00 $ 75.00
Interest on capital (8%) 480.00 480.00 430.00
Depreciation 135.00 135.00 135.00
Management 200.00 200.00 200.00

Total overhead costs $ 890.00 $890.00 $890.00

Total Annual Costs (Wind machines) $2,247.25 $1,739.75 $1,268.00

Investment Costs
Investment cost (land) 2,500-$10,000/acre
Irrigation, frost solid set $2,000/acre
Wind machines, heaters $1,000/acre
Shop $100/acre
Equipment $75/acre.

Total Investment Costs $6,675/acre



*Information taken from personal interviews and California Extension Service
Information (U.C. Extension sheet AXT-226).


Source: (Baritelle, 1973-74).














REFERENCES


Baritelle, John L. and Raymond J. Folwell. "A Brief Overview of
the United States' Grape Industry," Fruit Situation, September

Barietlle, John S. "Should I Enter the Vineyard Business," Speech
at 1973-74 Winter Short Courses, Washington State Cooperative
Extension Service.

and Raymond J. Folwell. "The U. S. Grape Industry:
An Expanding Industry," Mimeo.

Clevenger, Thomas S., Mohammed I. Haider and Neil A. Patrick. Poten-
tial Profitability of Wine Grapes in the Mesilla Valley. Research
Report 333, January 1977, Agricultural Experiment Station, New
Mexico State University.

Crocker, T. E. and J. A. Mortensen. "The Bunch Grape," Fruit Crops
Fact Sheet FC-17, 1976, Florida Cooperative Extension Service.

S"The Muscadine Grape," Fruit Crops
Fact Sheet FC-16, 1976, Florida Cooperative Extension Service.

Folwell, Raymond J. and John L, Baritelle. "Who Buys Wine, A Market
Analysis," Paper to the Wine Industry Technical Services, Novem-
ber 14, 1975, Fresno, California.

Good, D. L. and T. D. Jordan. Economics of Grape Production in the
Great Lakes Region of New York. A.E. Ext. 75-18, June 1975,
Agricultural Economics Department, Cornell University.

Grosz, E. A. and T. E. Crocker. "Sales, Marketing and Profitability
of a small Pick-Your-Own Vineyard," Proceedings, Florida State
Horticultural Society, 1974.

Hart, Kenneth H., Jr., and Leo Polopolus. Potential for Commercial
Grape Production in Florida. Ag. Econ. Report 8, April 1970,
Food and Resource Economics Department, University of Florida.

Institute of Food and Agricultural Sciences. Agricultural Growth
in An Urban Age. University of Florida, 1975.

Ison's Nursery & Vineyard. Muscadine Grapes. Brooks, Georgia.

Mathia, Gene A., Allen Beals, Norman C. Miller, and Daniel E. Carroll, Jr.
Economic Opportunities for Profitable Winery Operations in North
Carolina. Economic Information Report 49. North Carolina State
University. January 1977.


-22-






-23-


Mortenson, J. A., W. C. Adlerz and D. L. Hopkins. "Thirty Questions
and Answers for Grape Growers," Leesburg ARC Research Report
WG 75-5, September 29, 1975, University of Florida.

Moulton, Kirby S. "California's Emerging Acreage Situation," Wines
and Vines, February 1977.

U. S. Department of Agriculture. Agricultural Research Service. Food
Consumption of Households in the South, Seasons and Year 1965-66.
Report No. 15, January 1973.

Economic Research Service. Food
Consumption, Prices and Expenditures. Supplement for 1975 to
Agricultural Economic Report No. 138. January 1977.

Economic Research Service. Fruit
Situation.

Washington State University. Economic Development Impact of An
Expanded Wine-Grape Industry in Washington. Report for Econo-
mic Development Administration, U. S. Dept. of Commerce,
June 1974.

Technical and Economic Assistance in
Fostering the Economic Development of the Wine-Grape Industry
of Washington. Report for Economic Development Administration,
U. S. Department of Commerce, June 1975.

Wines & Vines Magazine, May 1976 and May 1977. Statistical Issues,
and other selected issues.




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