Monitoring report looks at wine grapes for first time

The Ministry of Agriculture and Forestry’s (MAF) 2004 Farm Monitoring report into horticulture for the first time considers the status of viticulture.

The annual monitoring process on horticulture examines the production and financial status of vineyards and orchards in terms of their cash income and expenditure. It also addresses trends, issues and sector concerns.

The Ministry’s policy analyst based in the Hawke’s Bay, Rachel Monk, says the rapid expansion of New Zealand’s viticulture sector and the increasing importance of the industry to New Zealand’s economy have highlighted the need for a greater understanding of the business of growing grapes.

“The two model vineyards chosen, in Hawke’s Bay and Marlborough, are representative of their type in the two regions,” Rachel Monk says.

“The report looks at the production and financial expectations of grape growers for the 2004 and 2005 seasons. Information is drawn from discussions with the growers concerned and a wide cross-section of agribusiness.”

She stresses that the report reflects the growers’ expectations and intentions, and the thoughts of those servicing the sector. They are not MAF price or production predictions.

The monitoring results show the viticulturists in Marlborough and Hawke’s Bay received net trading profits in 2004 of $169,548 and $131,501 respectively. The increased supply of grapes in both regions is however, causing growers to forecast a slight reduction in prices for the 2005 season.

The report also finds that growers are facing increasing production costs as the drive towards quality grapes continues. Growing under contract and maintaining good relationships with contract wineries is seen as important by the growers in order to make the right decisions regarding quality parameters and producing a crop that is desired by the market.

The report finds that for the year ended June 2004, export prices for New Zealand wine have fallen for the second consecutive year due to the strength of the New Zealand dollar. It forecasts prices to fall further due to continuing exchange rate effects and also the large volumes of New Zealand wine that will be made available on the international market. In the medium term, the report forecasts prices will begin to rise slowly in response to more favourable movements in the exchange rate.

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