1. Growing Grapes in Kentucky
Production, Market, and Expected Return
December 2008
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Table of Contents
Overview
Market Opportunities
Production Characteristics
Cost and Return Analysis
Risk Analysis
Summary
Appendices
References
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Overview
Commercial winegrowing was started in Kentucky as early as in 1799
Due to the prohibition in 1930s, the winemakers out of business and back in 1980s
Wine grape acreage quadrupled from 1998 to 2002
Vinifera types have the potential to make the best quality wine
Grapes require about 200 frost-free growing days and can be grown in most area in KY
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Market Opportunities
Market in KY is limited, concentrated at the farmers market and fine dining levels
Varieties of grapes can be consumed fresh or used to make grape juice, Jams, Jellies, and wine
Wine grapes offer the opportunity to market larger volumes
Several wineries operating in KY are interested in purchasing certain KY grown grapes
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Market Opportunities
Export Market (for large producers)
Marketing Grapes in Kentucky (Marketing Profiles)
- Kentucky Market maker
- Kentucky Restaurant Rewards Program
- Marketing Fresh Produce at Farmers Markets
- Marketing at Produce Auctions
- Marketing Fresh Produce to Restaurants
- Community Supported Agriculture (CSA)
- Pick-Your-Own (U-Pick) Marketing
- Grower Cooperatives (Co-ops)
- Marketing Via the Internet
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Health and Nutrition
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7. Production Characteristics
Site Selection and Planting
Grapes reach full bearing potential in four years and bear annually
Sites should have full sun exposure, good air circulation, and well-drained soil
Rolling hillsides with stabilized soil are fine, best sites are above the level of adjoining land, so that cold air drains away from the planting
The site need to have adequate water for irrigation
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8. Production Characteristics
Also need to consider potential biological problems, such as perennial weeds, disease organisms, insects, and birds
Once find the suitable site, need to send soil sample for the analysis of pH, Ca, Mg, B, P, K, etc
Gapes perform best where soil pH is between 5.0 and 6.0 – at planting, adjust the soil pH to 6.5
Need to take a soil test and follow test recommendations prior to planting
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9. Production Characteristics
After adjusting the soil prior to planting, additional fertilizer is not needed at the first year
During subsequent years, apply fertilizer in late winter or early spring
There are many grape varieties (cultivars) and each category of grapes has its own characteristics and each cultivar within the categories has advantages and disadvantages
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10. Production Characteristics
Vines are normally planted in the spring, but can be planted in late fall
Grape vines require a trellis for vine support which should be in place by the start of the second growing season
A trellis for vine support should be designed and constructed to be strong and long-lived and require low maintenance – should last more than 20 years
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11. Production Characteristics
Maintenance
Vineyards require canopy management, in addition to pruning and training, to ensure high-quality fruit is delivered to market
Canopy management includes: shoot thinning, shoot positioning, cluster thinning, shoot hedging and leaf-pulling
Thinning strengthens the vine and improves grape quality by increasing the ratio to fruit
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12. Production Characteristics
Most growers use herbicides and / or mechanical cultivation for weed control
Netting and noisemakers are the two most common methods of bird control used
Common grape diseases include anthracnose, black rot, Phomopsis cane and leaf spot, powdery mildew, downy mildew, gray mold and crown gall
Fungicide applications, along with good cultural practices, are critical for the management of these diseases
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13. Production Characteristics
Pest management
Insect pests such as the grape berry moth, flea beetles, phylloxera, leafhoppers, Japanese beetles, green June beetles and grape cane gall makers can all attach grapes
Regular scouting is necessary to monitor insect populations.
Grapes usually require 12 to 15 pesticide sprays per season
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14. Production Characteristics
Harvest and storage
Harvesting is the busiest and most labor intensive part of grape production
Grapes are typically harvested in the Fall, from September through October, but some grapes are picked in beginning of December
Optimum harvest time depends on the cultivar, growing season, and intended use of the fruit
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15. Production Characteristics
For the fresh market harvest grapes should maximize the color and flavor
Many factors affect the quality of wine grapes and mainly based on percentage of sugar
Harvest wine grapes after the due has dried off, and keep them out of bright sunlight until pressed or refrigerated
Grapes are best stored near 31°F and at 85% relative humidity
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16. Production Characteristics
Picking and Pressing
Grape harvesting is an age-old tradition that still occurs to this day
Grapes are picked by hand and processed using methods that were devised centuries ago
Once the grapes are picked and collected by pickers, then send to a pressing area for process
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17. Production Characteristics
Labor requirements
Labor needs per acre during the first and second years include planting (30 hours), training (30 hours) and maintenance (24 hours)
A fruiting vineyard will require vine and trellis maintenance (80 hours) along with spraying and mowing operations (48 hours)
Harvest will require approximately 48 hours per acre
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18. Production Opportunities
Wine grapes are feasible in Kentucky when the market prices approach $1,000/ton
Sound management that maximizes wine grape yields and minimizes input cost, as well as marketing that captures top grape prices, are necessary making wholesale grape production economically viable in KY
Use Vinifera (European Hybrids) for the Cost estimation
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19. Product Cost and Return Estimates
Planting cost
Production cost
- Fertilization, pesticides, cultivation, etc
- Equipment costs (irrigation and machinery)
- Harvest lugs
Labor cost
- Assigned at a wage rate of $8.00/h for untrained labor, $10.00/h for others
Fixed costs
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20. Production Cost Overview
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21. Gross Revenue, Costs, and Return
Price: $1,400 / ton
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Risk Assessment
Market Risk: Price is variable ($800 to $1,600 – Vinifera)
Production Risk:
Financial Risk: Grapes reach full yield after four years of growth, especially no out put first two years. Must have capital sources before the full yield
Net Present Value of 10-year cumulative return estimated with 7% discount rate
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23. Risk Assessment – Payoff Table
Price & Yield
Return
Chart for
Total Return
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24. Risk Assessment – Payoff Table
Chart for
Net Present
Value (10 years)
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Basic Summary
Market Opportunity
- Wine Industry
- Regional Groceries
Advantage of Kentucky for Grape Growing - KY has long history of growing grape
- Several wineries in KY are interested in local grown grapes
- The weather in KY is suitable for growing the most grape cultivars
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Appendices
Data Source
- Year 2005 University of Kentucky
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Appendix – Price Paid Per Ton (By variety, 86 wineries surveyed in IL, IN, KY, OH, MO, TN, VA)
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28. Appendix – Production Detail
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29. Appendix – Production Detail
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30. Appendix – Production Detail
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31. Appendix – Production Detail
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32. Appendix – Production Detail
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33. Appendix – Production Detail
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References
Health and Nutrition
Market Opportunities
Production Characteristics
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References
Risk Assessment
Disease Management
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