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~ Grape Growing Information ~

Commercial Vineyard Establishment in Maryland
Intro   Sites   Winery Requirements   Economic Considerations   Chronology   Sources of Vines   Reference


Economic Considerations


The costs of vineyard establishment will vary widely, depending on a number of factors. A significant portion of the initial outlay will be alleviated if items such as land, and farm staples such as tractors and wagons, are already on hand. Total labor costs can be minimized if the vineyard owner does the work, or a significant part of it, himself. (One exception is harvest, which must be accomplished in a relatively brief time span and therefore requires additional labor forces).

It is advisable to start small and expand as needed. Minimal equipment is required for up to 3 acres, after which significantly larger equipment will be required.

Many of the expenses are one-time costs, such as site preparation, purchase of vines, trellis posts, etc. So the initial year's outlay will appear rather formidable -- although some of the costs, such as posts and trellis wire, can be spread out over, or even delayed until, the second year. Once the vines are established (usually the 3rd year), expenses should be fairly consistent.

The following budget chart is based on figures from several commercial vineyards of at least five acres in Maryland and Virginia, and assumes a hospitable site --ie, acceptable soil and weather conditions. Vine and trellis spacing differed somewhat in the vineyards sampled, but the costs were fairly consistent. The simplest trellis/wire configuration (2-wire double cordon) is assumed, although later addition of extra support wires is also factored in.

Labor costs are included, but not insurance, taxes, financing or data management time (marketing, sales, promotion, public relations, meetings, contract negotiations, etc). Labor is based on a rate of 7.50/hr, and amounts to approximately 40% of the total operating budget.

Description Expense Income Cumulative Net
Year One $ 4,290 0 - $ 4,290
Year Two $ 1,650 0 - $ 5,940
Year Three $ 1,915 $ 600.00 - $ 7,255
Year Four $ 1,960 $ 2,800.00 - $ 6,415
Year Five $ 1,975 $ 4,200.00 - $ 4,190
Year Six $ 1,975 $ 4,200.00 - $ 1,965
Year Seven $ 1,975 $ 4,200.00 + $ 260



Capital Expenses
Where possible, items in this category were purchased used. It is worth noting that some of these items (eg, tree planter, post hole augers, etc) could also be rented. Farm machinery maintenance costs are included, but not time (labor) of maintenance. Vines in most cases were viniferas, so initial purchase costs were roughly double that for hybrids (again, purchase costs can be reduced or eliminated by propagating them from existing vine cuttings).

ESTIMATED CAPITAL EXPENSES
Item Cost
Tractor (40 - 50 hp) (used) $7000
150 gal sprayer (used; for fungicides) $3,000
50 gal sprayer (used; for herbicides) $500
Post-hole drill (3-pt hitch) $650
Mower (used) $600
12-foot trailer wagon $1,300
Tree planter (used; 2-man) $100
Total Capital Expenses $13,150

These figures constitute the heaviest expenditures, but will vary widely depending on whether any or all the items are already in hand, or whether they are purchased new or used.


Intro   Sites   Winery Requirements   Economic Considerations   Chronology   Sources of Vines   Reference


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