September 29, 2004
What's a Vineyard Cost?
One of our main goals in keeping this journal (OK, it's really a 'blog') is to help any future prospective vineyard owners in their planning (and when we're old it sure will be fun to read back through these first years!) Our plan for this fall/spring is to get four acres in the ground.
In the early planning stages, at every turn is the question "What's it going to cost?" So in an effort to encourage (or dissuade) people from entering this business Shannon and I decided to be very open about operating costs. Not that it's a big secret - there is a wealth of information online outlining startup costs. One of the best is "The Economics of Wine Production in Virginia" which we have just about memorized now.
So adjusting for different row/vine spacing and inflation:
1 acre = $15,000 to plant, $3,000/year maintenance
This does not include the land!
Of course there are some variable costs (mostly labor) that can possibly get your intial costs down near the $12,000 per acre range, but you have to be realistic - are you REALLY going to be out in the vineyard for four weeks loading 8' timbers into a post-driving machine? Yeah right...
At the vineyard seminar we listened to a great session given by Dennis Horton of Horton Vineyards. He gave a hard-truth session on business plans, and indicated that you CAN make money in this business, but the absolute #1 rule is "Don't carry too much debt doing it." So we've taken that advice to heart and our financial strategy (with the exception of the land mortgage) is based on cash-only purchases. Not to say that at some point in the future a crop-loan is out of the question, but for now cash and carry is the sure route.
That said, it sure tests your mettle when you're founding a vineyard and a family at the same time, to think that you just stuck four college educations in the ground.
Posted by Stephen at September 29, 2004 5:14 PM