Sunday, May 15, 2011

A look into the economics of Central Oregon viticulture

Papers filed in the application to Deschutes County to establish a winery associated with the existing Faith Hope & Charity vineyard in Terrebonne give a glimpse into the economics of viticulture.
In a March 22 memorandum, attorney Andrew Stamp representing the vineyard owners, estimated that a one-acre vineyard would yield approximately 3 tons of hybrid grapes. A single ton of grapes could produce 160 gallons of wine, or about 69.56 cases at 2.3 gallons per case.
By that math an acre of grapes could produce 208.68 cases, and a 15-acre vineyard which meets the minimum size for a commerical winery on land zoned for agriculture might yield 3,130 cases.
At a price of $25 per bottle, or $300 for a 12 bottle case, the 3,130 cases could result in gross sales of $939,000, according to Stamp’s calculations.
The numbers are important in the approval of the winery for Cindy and Roger Grossmann and their Faith Hope & Charity vineyard and winery. The hearing officer who approved their application found that no more than 25 percent of the winery’s gross sales could come from non-wine items and events, such as weddings.
Assuming the potential wine sales of $939,000, the winery would be allowed to gross $234,750 from other sources if the vineyard yielded three tons of grapes an acre, or 45 tons for 15 acres. If the yield were only half that, or 1.5 tons per acre, the allowed income would be $117,375 from incidental goods and services or events.
Stamp noted that arguments by winery opponents that weddings could be held every week were exaggerated. More likely, he wrote, the number would range from 10 to 20 annually.  Hearing officer Karen Green wrote she was “persuaded by this evidence”  that the winery could meet the limitation on gross income from events and other non-wine sales.