BEFORE YOU BUY A VINEYARD CHECK THIS OUT
MICRO-CLIMATES CONTROL WHAT GRAPE VARIETAL TO PLANT
Depending on Appellation (AVA), varietal and micro-climate in the County the grape varietals must be planted where they do the best for the highest quality. For instance, Napa gets more money for their Cabernet Sauvignon (Cab/Sauv) varietal grapes then Sonoma County. On the other hand Sonoma County gets more money for their Pinot Noir then Napa County.
These differences have to do with growing conditions, meaning mainly micro-climates. Cabernet Sauvignon and other Bordeaux varietals need a hotter climate like in Rutherford, St. Helena Yountville and other surrounding AVA’s in Napa County. However Pinot Noir and Chardonnay need a cooler climate. As Sonoma County boarders on the Pacific Ocean in the Russian River, Green Valley and Sonoma Coast AVA’s the temperatures are much cooler, thus the Pinot Noir and Chardonnay are much happier.
Whereas Napa is more inland away from the Ocean influence, the Bordeaux varietals such as Cab/Sauv, Cab/Franc, Merlot, Petite Verdot and Malbec like the hotter micro-climates, thus Napa in most cases is the better location for these varietals. Of course there are always exceptions to the rule. Sonoma County grows some very high quality Bordeaux varietals in Alexander Valley, Knights Valley, Pine Mountain-Cloverdale Ridge AVA’s and Napa grows some high quality Pinot Noir and Chardonnay in the Carneros AVA as well.
WHAT GRAPE VARIETAL DO I BUY?
MY suggestion to you when looking for that perfect grape varietal to grow in the wine country is not to look for that perfect varietal at all. If you are going to live there as a primary residence or second home, look in the areas that you like and feel most comfortable and buy what feels good for you and your family. Then, plant or buy an existing vineyard that does the best in that area. You can always buy any other varietal of wine from the grapes that you love at any time to drink.
Grape sales prices differ from one varietal to another and where they are grown. Mid Napa Valley is the “King of Cab” for the highest prices, whereas Sonoma’s Russian River AVA is the “King of Pinot Noir and Chardonnay”. The farmers in these areas will get the highest per ton price for their grapes when sold to a winery.
It follows that the more valuable the grape, the more valuable the vineyard. It is particularly important to know when evaluating a vineyard for purchase to take note of whether or not the varietal is properly matched to the micro-climate and soils.
When planting a vineyard, the varietal must be matched to the soil, water and temperature characteristics of that AVA, or it will not produce the quality of grape that will bring top dollar. These factors need to be considered when evaluating a vineyard.
Napa and Sonoma Counties have several appellations whose combined characteristics produce a distinctly superior grape. There are other AVA’s that have been designated, but are still struggling hard to get the recognition of certification. The one thing that all of the Napa and Sonoma AVA’s have in common is that they are known to produce some of the finest wine grapes in the world.
WHAT DOES IT COST TO PLANT A VINEYARD?
RAW PLANTABLE GRAPE LAND
Depending on location an acre of plantable grape land will cost you from $30,000 to $125,000 for a rawacre of proven plantable land for wine grapes. Napa is the highest cost for plantable grape land. Ground zero or the most expensive is between St. Helena, Oakville, Rutherford and Yountville with values up and around $125,000 per acre of raw plantable land. The least expensive in Napa will be in the Pope Valley area at around $40,000, then prices move up in Carneros at around $55,000 then as you move North up the Valley, the prices increase, all the way to ground zero.
In Sonoma, prices are less expensive. The highest values will be in the Russian River, Green Valley or Coastal AVA’s at from $45,000 to $80,000 per plantable acre. Other areas of Sonoma County plantable grape land will cost you from $30,000 to $50,000 per acre.
WHAT DOES IT COST TO PLANT THE VINES?
The cost to plant the vines will vary depending on slop density, trees, rocks, creeks and other county restrictions at that location. The cost can run from $30,000 to over $100,000 per acre depending on thecircumstances. Don’t attempt to do this alone. Once you have determined the property that you want to buy, you bring in your viticulture expert to advise you as to what needs to be done to the land before you plant. He/She will help you design your vineyard, from the Rows to the spacing, vine count, varietal, rootstock, clone, irrigation system, etc. once you have architecturally designed your vineyard, you bring in your vineyard management company to follow the plans of the viticulture expert. The vineyard manager then goes to the nursery and orders the rootstock and clones of the varietal of your choice. There are two ways to plant the vineyard from here on, one way is to do a “Bench Graft” and the other is a “Field Graft”. Which you made these decisions, your vineyard manager will give you a cost to plant the vineyard.
A bench graft is when the nursery grows the rootstock in the clone separately then graphs the clone onto the rootstock and allows it to grow one year in the nursery before planting in the ground. The field graft is when you plant the rootstock in the ground than one year later you graft the clone on to the rootstock in the field. As there is no set way to do this it’s up to you and your vineyard manager and viticulture expert to determine what’s best for you.
While your new vines are growing in the nursery, it’s time to prepare the field to plant. From the viticulture report it will be determined if the land needs nutrients. The vineyard manager will order all of the nutrients needed and began ripping the vineyard land back and forth with rippers digging from 3to 5 feet into the soil. Once all the soil has been turned the nutrients are then scattered throughout the land. Then the vineyard manager finally discs the soil in the nutrients together until the field is a fine dust. The next step is up to Mother Nature. The vineyard is then let set through winter were the rain will blend all the nutrients in soil together for perfect growing conditions. In the spring when the sun shines in the rains are over the vineyard manager then discs the soil again rolling all of the nitrogen high vegetation that is grown on the land back into the soil. The next step is to lay out the vineyard.The rows are laid out with small plastic knives inserted in the ground where each fine will be planted. The spacing will be determined by the vigor in the soil in the viticulture expert advice. Normal planting today will be 6 to 8 foot rows with the vines space 4 to 6 feet apart.
The next step is to install the irrigation system, end posts, stakes and wires. Depending on whether you’re using bench graft or field graft techniques, you will then install the one-year-old entire crafted vine, or the rootstock. Usually a cone is placed over the new vine to protect it from rabbits, insects into hold water with drip irrigation drips into the cone. At this point it’s up to Mother Nature in the expertise of your vineyard management company.
The vineyard manager will maintain and babysit the new vines and Mother Nature will put the heat on the new babies to build their strength for years to come. It will take three years before you see a crop.If you desire high-quality grapes, you will drop the first years’ fruit. This will allow the vine to put its energy into the parent plant instead of the grapes, thus allowing the parent plant to become stronger and more powerful for many years to come. Your first real income producing crop will be either in the third or fourth year, depending on field graft or bench graft. The field graft takes four full years to harvest first quality fruit and the bench graft will take three years for their first income producing harvest.
All your grapes are growing will be establishing a grape purchase agreement or agreements with local wineries to purchase your grapes. During the time from planting the vineyard until you get your first harvest to produce income you will have to pay for professional vineyard management to maintain the vineyard. This cost will run you from $4000 to $8000 per acre per year. The estimated cost for this service can be determined prior to signing the vineyard management contract in the beginning. You can see that there is a lot of pocket expense planting and managing the vineyard before you see any money.
When you plan this new venture, you want to plan on at least three years of reserve to cover the costs to operate and maintain the new vineyard. Realistically won’t see any money for years. Depending on the grape purchase agreement that you have with the winery and the number of tons projected annually by your viticulture expert, you can somewhat determine your income and expenses before you start. Please realize that there are three things that determine the outcome of your vineyard annually. They are 1) Mother Nature, 2) the economy 3) good management. Mother Nature is unpredictable as is the economy; however the only thing you can control is management. Every year your yield will differ there’ll never be two years with the same exact tons per acre produced. Give yourself a broad brush approach to your budget.
All of that said, if you can find a good young productive producing vineyard already, it’s best off to buy that instead of starting new from scratch if this is your first time out.
WHAT CAN I SELL MY GRAPES FOR?
We only know what 2011 grapes sold for on a per-ton base, however we have seen a larger demand than usual and the projection is that per ton grape purchases will increase from 10% to 40%. So knowing what we got in 2011 we can make projections for the 2012 harvest. Here is what we see:
BEFORE YOU BUY YOUR VINEYARD
Let’s assume that you have picked a vineyard property that you like. What questions should you ask the seller or the agent representing the owner?
Here’s a checklist:
- Is there a survey of the property?
- Is there a soils analysis?
- What are the sources of water? i.e., wells, springs, reservoirs?
- Is there a well drillers report? (to establish GPM) gallons per minute
- Is there a water analysis to test for bacteria, chemicals, or minerals?
- If there is a reservoir, how many acre feet is it? What is the source that feeds it? Is it filled year round by a spring or is it seasonal?
- How is the vineyard irrigated, if at all?
Does the owner have a vineyard layout or a plot plan showing:
a) the varietals of grapes by block;
b) the age of the vines;
c) the root stock and the clone that each variety is planted on;
d) number of vines in each varietal;
e) production per acre of each varietal;
f) who buys the grapes and for how much;
g) is there frost control and what type is it?
h) are there any known diseases in the vineyard?
i) what equipment is included in the sale;
j) is there a contract for the grapes? If so, let’s evaluate it…
There are excellent vineyard managers and viticulturists in every wine growing appellation that will be happy to work with you to thoroughly investigate your potential vineyard acquisition for a minimal fee. I strongly recommend that all potential vineyard acquisitions be investigated by a professional before closing escrow. (Our firm works with most of them and will be happy to refer who we feel would make your best team to work with). The team will do the following: Home inspection, termite inspection, well inspection, septic inspection, vineyard manager, viticulture investigation including, checking the roots, leaves, soils, production history, income and expense and check for diseases in the vineyard
GETTING STARED IN THE SEARCH
Not all Real Estate agents understand vineyard and/or Winery Properties. A vineyard is such a specialized investment it is in your best interest to use a broker or agent experienced in vineyard or winery transactions to make your purchase. I suggest asking your prospective agent/broker a few questions to satisfy yourself as to his/her qualifications of understanding vineyard properties and guide you safely through the process. The first questions would be; How many vineyard properties have you sold? How long have you been in the real estate business? What should I be looking for when buying a vineyard property?
Owning a vineyard can be financially rewarding and personally satisfying. Like any other investment, it takes forethought and patience to realize the most success. If you are interested in buying a vineyard, contact us. I am looking forward to helping you discover your dream of living in the wine country.
