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Considerations and Resources for Vineyard Establishment in the Inland Pacific Northwest

Considerations and Resources for Vineyard Establishment in the Inland Pacific Northwest

PNW634
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Michelle Moyer, Viticulture Extension Specialist, Department of Horticulture, Washington State University IAREC, Prosser, WA, Clive Kaiser, Horticulture Extension Faculty, Oregon State University, Milton-Freewater, OR, Joan Davenport, Soil Science Faculty, Department of Crop and Soil Sciences, Washington State University IAREC, Prosser, WA, Patty Skinkis, Viticulture Extension Specialist, Department of Horticulture, Oregon State University, Corvallis, OR
Vineyard establishment requires careful planning and implementation. This guide is designed to help you through the initial questions and considerations before establishing a new vineyard. Early decisions regarding vineyard purchasing, establishing a market for your product, and land suitability are key factors in influencing the success of your business. This publication is also a consolidated resource of the various governing and information bodies that oversee viticulture and enology in the Inland Pacific Northwest.
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Introduction

Vineyard establishment requires careful planning and implementation. This guide is primarily designed to ad- dress factors and critical questions that potential owners need to consider before establishing a new vineyard in eastern Washington, eastern Oregon, or western Idaho. These initial decisions regarding land suitability, vine- yard purchasing, vineyard establishment, and market- ing are key to the future success of a business. While predominately focused on the vineyard and grape pro- duction aspects of the industry, essential information regarding winery establishment is also included where issues for the two overlap.

This publication provides online links throughout the text to reputable information from state and national Extension programs and other local, regional, and federal organizations. If you are reading this guide on electronic media, accessing these links will take you directly to the corresponding website. If you are using this manual in hard copy form, please see the appendix for a numeric listing (corresponding to the endnotes) of website addresses that can be consulted later.

Vineyard Economics

Vineyard establishment requires significant upfront investment, and it will take years before you will see a return on this investment. So that you are reasonably prepared for such an undertaking, it is important to cre- ate a thorough and well-defined business plan.

Developing a Business Plan

To develop a business plan, know the following: (i) the average sales price for the different grape cultivars at harvest, which may vary tremendously between differ- ent viticulture areas and over time with wine produc- tion trends (see the Status of the Washington, Oregon, and Idaho Wine Industries section); (ii) how the grapes will be marketed (see the Location and Marketing sec- tion); and (iii) whether value will be added to the grapes by producing wine or if they will simply be sold to a winery or processor. Consider establishing a contractual relationship to sell grapes before purchasing vines and beginning the establishment process. Often winemakers

or purchasers will determine what variety to plant based on demand. The following resources are currently available to provide guidance in developing a vineyard business plan (see also the Financing section).

Vinewise1   is an electronic, interactive tool designed   by the Washington grape and wine industry to help growers through the business and viticulture-related issues associated with vineyard establishment. It can  be used as a sustainability report card because it offers a series of checklists that allows growers to  determine their environmental, economic, and social sustainabil- ity (see the Eco-labeling section for additional details). Vinewise covers topics such as business plans, market- ing, human resources, vineyard establishment, and  crop insurance.

There are several resources available to help you assess the development costs associated with starting a vine- yard in the Inland Pacific Northwest. One great resource is AgTools2. AgTools is an electronic, interactive tool designed to help growers understand the establishment and production costs related to wine grapes as well as other crops. The AgTools suite of programs includes Ag- Profit, AgLease, AgFinance, and AgPlan, which make up a free software package that allows you to assess profit and financial feasibility over a 20-year period with stan- dard inflate rates and equipment depreciation. You can access training materials online and attend training ses- sions held annually by Oregon State University (OSU) Extension if assistance is needed. Contact your local county Extension office for more information. North- west Grapes Cost-of-Production Calculators3 provide a quick assessment of production costs, require little to no training before they can be used, and can be modified using specific production cost numbers.

Enterprise budgets4 for wine grapes in Oregon are avail- able from OSU Extension; Washington State Univer- sity (WSU) Extension has publications regarding the economics and costs of producing juice grapes5 and wine grapes6; and University of Idaho (UI) Extension has a number of publications regarding the feasibility of growing wine grapes7. While these publications can provide state-specific information and explanations of what types of assumptions are made in determining profitability, they are dated.

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Copyright 2012 Washington State University

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Issued by Washington State University Extension and the U.S. Department of Agriculture in furtherance of the Acts of May 8 and June 30, 1914. Extension programs and policies are consistent with federal and state laws and regulations on nondiscrimination regarding race, sex, religion, age, color, creed, and national or ethnic origin; physical, mental, or sensory disability; marital status or sexual orientation; and status as a Vietnam-era or disabled veteran. Evidence of noncompliance may be reported through your local WSU Extension office. Trade names have been used to simplify information; no endorsement is intended.