Replant Profitability

We planted our own commercial vineyard almost 20 years ago and we realised that eventually our vineyard’s productivity will begin to decline and become less profitable.
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We planted our own commercial vineyard almost 20 years ago so that we could get a better understanding of our customer's needs as grape growers.   We are now realising that eventually our vineyard's productivity will begin to decline and it will become less profitable.Like everyone, we don’t really know when this will happen.

The decision to replant our vineyards is also tinged with mild uncertainty taking into account the lack of available information and the economic impact of a vine pull and replant. In 5 years, we can see that by strategically replanting our vineyard, yield will be maintained alongside a sustainable profit margin.

But to get from here to there we ask ourselves:

  • What is the best plan to stagger our planting over multiple years?
  • What are the best viticultural practices to use when replanting?
  • What new technologies/advances in the industry should we employ when designing a "vineyard for tomorrow?"

To begin this process, we needed some independent advice from an expert. After an initial conversation with Mark Allen from Mark Allen Vineyard Advisory Services Ltd., we came up with a graph to provide us with some basic guidelines:

Replant Profitability
Replant Profitability

*Please note this graph is not supported by any hard data. It is hypothetical, and each vineyard will tell a different story. 

The graph helps us to understand that if we take into account our running costs per hectare and the current grape price, we have to maintain an average yield of 10 tonnes/Ha just to break-even.   To make a profit, we should produce 12 tonnes/Ha.

When considering replanting, the graph reveals that:

  1. On average, Sauvignon Blanc production peaks at 5-6 years. This level of production can be maintained for 20-25 years as long as there is no disease.
  2. After 25 years, vineyard yield will likely decline as a result of trunk disease and/or virus.
  3. By 30 years yields will be declining and you will probably be operating at a loss.
    Stage your Replanting Programme for the top of the graph, and always have your vineyard life operating between 5-25 years old.
  4. If you wait until your farm profits dip below the break-even point, it is too late to stagger the economic impact of your replant.

Mark also states that:

  • As a general strategic rule of thumb, it is recommended to replant 20% of your vineyard every year for a 5 year period, or 33% every year for 3 years. This can be spread out even further if needs be.
  • Get a holistic image of what is happening on any blocks suffering from drainage issues. Replanting will not sort out the bigger picture of a drainage problem. If anything, new plants will die quicker due to leftover pathogens in the ground.

Our vineyards are still functioning well, and there is no evidence yet of trunk diseases, root disease or leaf roll virus (LRV 3). But the potential to lose yield in the future means we need to start our Replanting Programme today.

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