Frequently asked questions
How much does land cost in Cromwell?
Land in the Cromwell basin which has access to irrigation water ranges in price from $60,000 to $100,000 a hectare for bare land depending on location. Average prices of land are difficult to accurately set – they really depend on the area, whethere there is a house on site and suitability of the land. A number of real estate agents operate in Cromwell. Links to their websites are provided in the Links section.
How much does it cost to develop a vineyard?
This very much depends on the location and what needs to be done to the land, however, developments typically run from $50,000 per hectare to $75,000 per hectare depending on the development with an average of $60,000 per hectare. This price includes land preparation (but not deep ripping and and rock removal), vines, posts, wires and their installation (basically all the tasks outlined in the development section) but excludes frost fighting equipment (e.g., frost fans or a water frost fighting system).
How much does it cost to run a vineyard?
Vineyard size and location, farming system (organic/conventional), quality tier (entry to ultra premium), row width, vine spacing, spur/cane pruning, machine/hand harvest, , who owns the equipment, contract/hourly wage rates - all these factors have an effect on the annual cost. For a very large vineyard that targets entry level wine that is close to Cromwell with their own equipment expect about $16,000/ planted hectare. For a small organic vineyard without any equipment located a long way from Cromwell targetting icon quality fruit expect costs upwards of $25,000/ planted hectare. Wage rates in New Zealand have been inexorably rising and with labour being about 60%+ of cost this has a direct effect on costs.
What sort of returns can we expect?
Average returns generated in Central Otago for the sale of grapes are set out in the NZ Winegrowers Statistical Annual Report.
See http://www.nzwine.com/info-centre/#statistics for detailed information.
Selling grapes, once development costs are applied into a discounted cashflow analysis, will typically generate an internal rate of return of 3-5% (largely dependant on land and development costs), whereas selling wine made in a contract facility will generate a 15-20% internal rate of return (largely sales price dependant).
What varieties grow well in Central Otago?
Central Otago is rapidly developing a name for itself for growing exceptional quality Pinot Noir and this tends to the flagship variety on most vineyards. Some 76% of grapes planted in Central Otago are Pinot Noir. A number of other varieties do well in Central Otago including:
- Pinot Gris
- Sauvignon Blanc
- Cabernet Franc
Which clones and rootstocks should we use?
We recommend that a variety of clones be used on any vineyard - this decreases the risk of poor flowering and fruitset as the clones tend to do this at different times and having different clones also increases the blending options available to the winemaker. We also recommend the use of a variety of rootstocks as there is no singular perfect rootstock for a site - this will only become apparent over time. So by using multiple rootstocks you will again be spreading risk. As our growing season in Central Otago is typically short we usually use rootstocks which encourage the scion to have a short season. Additionally, we select rootstocks that devigorate the scion to encourage the production of high quality fruit. The rootstocks we mostly recommend are:
- 101-14 (not recommended so much any more due to concerns about vine die back)
- SO4 (on low vigour sites or for Organic farming)
What trellis system should we use?
We typically recommend the use of the Vertical Shoot Positioning (VSP) trellis system but this depends on the natural vigour of the site. The VSP allows a high level of mechanisation, particularly when used in conjunction with spur pruning.
We do however manage sites on a high wire/sprawl system and on a Geneva Double Curtain system which makes for some challenging canopy management!
Spur pruning or cane pruning?
We recommend that clients spur prune as we believe that spur pruning offers the following benefits (except of course on Sauvignon Blanc):
- Low yield, suiting the production of high quality grapes
- Increased carbohydrate reserves, with the additional permanent wood in the cordon, which is necessary due to the short growing season
- Increased mechanisation, enabling the use of a barrel pre pruner, saving time and money without compromising quality
- Easy to train staff to prune
- Increases evenness of budburst and shoot growth, leading to less variable flavours at harvest
If you have any other questions - please contact us directly and we will do our best to answer them promptly. Please also note that prices and returns are subject to commercial risk and change!