| Summary |
 This report presents the results of a survey of wine grape growers in the Murray Valley and Barossa regions conducted between October 2007 and March 2008. Detailed data were collected describing the physical, financial, environmental and socioeconomic characteristics of wine grape growing farms in these two regions as at the year ending 30 June 2007. |
| Murray Valley region |
The Murray Valley is a warm climate wine grape growing region located in the far north-west of Victoria and far south-west of New South Wales. Wine grape production in the Murray Valley accounts for around one-quarter of all wine grapes crushed in Australia.
The 2006-07 growing season in the Murray Valley was hot and dry. Wine grapes are estimated to have been irrigated at a rate of 7 megalitres per hectare on average, using a combination of drip and trickle systems, sprinklers and flood irrigation. Yields are estimated to have been 13.5 tonnes per hectare for red wine grapes and 19.4 tonnes per hectare for white wine grapes, on average. Growers are estimated to have received, on average, $392 per tonne overall for red wine grapes and $389 per tonne for white wine grapes. These prices are characteristic of those received in warm climate grape growing regions in 2006-07.
Total cash receipts are estimated to have been around $189 000, on average. Wine grape receipts accounted for an estimated 65 per cent of total cash receipts. Receipts from other tree and vine crops accounted for an estimated 27 per cent of total cash receipts. Total cash costs are estimated to have been $134 000 on average. The net result was farm cash incomes of around $56 000, on average. After deductions for depreciation and accounting for the value of family labour, the average farm business profit for Murray Valley wine grape growing farms is estimated to have been around $9000 in 2006-07.
Farms with up to 20 hectares planted to wine grapes realised an estimated business loss on average of $10 000, with an estimated rate of return of 0.4 per cent excluding capital appreciation. Farms with more than 20 hectares planted to wine grapes realised estimated business profits on average of $91 000 with an estimated rate of return of 6.3 per cent excluding capital appreciation in 2006-07.
Land use planning, labour shortages and the cost of irrigation infrastructure were identified as impediments to farm expansion by around one-quarter of growers surveyed. Some respondents also reported that a lack of irrigation water and the viability of the industry were impediments to farm expansion in the region.
At the time of the survey it is that 30 per cent of growers had intentions to leave agriculture within five years. In addition, an estimated 10 per cent were intending to diversify or change their agricultural operation. |
| Barossa region |
The Barossa incorporates the Barossa Valley and Eden Valley wine regions, located 80 kilometres north-east of Adelaide. The Australian Bureau of Statistics (ABS) classifies the Barossa as a cool climate wine grape growing region. Wine grapes produced in the Barossa region account for about 5 per cent of all wine grapes crushed in Australia.
Drought conditions and high temperatures during the growing season had a severe impact on wine grape production in the Barossa region in 2006-07. Wine grapes are estimated to have been irrigated at a rate of around 1 megalitre per hectare using drip and trickle irrigation systems. Some wine grape areas in the Barossa are unirrigated. Yields are estimated to have been 4.6 tonnes per hectare for red wine grapes and 6.5 tonnes per hectare for white wine grapes, on average. Growers received an estimated $1353 per tonne for red wine grapes and $824 per tonne for white wine grapes in 2006-07, on average.
Total farm cash receipts in 2006-07 are estimated to have been $156 000, on average, of which receipts from wine grape sales accounted for an estimated 83 per cent. Total cash costs are estimated to have been around $125 000. The net result was farm cash income of around $31 000 in 2006-07. After deductions for depreciation and allowing for the value of family labour contributed, farms recorded estimated business losses, on average of -$29 000.
The cost of irrigation infrastructure and regional land use planning were each agreed to be impediments to farm expansion by around 10 per cent of growers. A number of respondents also indicated the price of land and a lack of irrigation water were impediments to farm expansion in the region.
At the time of the survey about three-quarters of growers expected to have a similar level of involvement in the industry in five years time. Around 8 per cent of growers expected to be semi-retired and about 3 per cent expected to be fully retired within five years. |
| Comparison |
Wine grape growers in the Murray Valley irrigated more intensively and achieved significantly higher yields in 2006-07 on average, than did growers in the Barossa region. However, producers in the Barossa region received higher prices.
Among growers with more than 20 hectares planted to wine grapes, producers in the Murray Valley region received higher wine grape receipts per bearing hectare than producers in the Barossa region. In what would have been regarded as a difficult season for growers in both regions, growers with more than 20 hectares planted to wine grapes in the Murray Valley region received significantly greater total cash receipts on average and realised significantly higher rates of return excluding capital appreciation.
Small to medium sized growers in the Murray Valley region had significantly higher debt on average, than small to medium sized growers in the Barossa region in 2006-07.
The proportion of growers in the Murray Valley expecting to retire within five years was significantly higher than in the Barossa region. The proportion of growers in the Murray Valley expecting to diversify their agricultural operation was also significantly higher. In contrast, the proportion of growers expecting to have a similar level of involvement in the industry in five years’ time was significantly higher in the Barossa region than in the Murray Valley. |
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