Ready to find out what properties are available right now?

1. Before we get started

If you are thinking about purchasing either an existing vineyard or raw land on which you hope to install a vineyard, there’s a lot you need to know. But as we went through the same process ourselves, we discovered that there are very, very few sources of good information on buying and/or developing a vineyard.

So we’ve tried to include the very basics here. The information provided here is meant only to give you an idea of the scope of issues you will face when purchasing vineyard land and is by no means complete. We strongly encourage you to track down all the information you can from other sources prior to your purchase.

Things to think about:

• Do you want an established vineyard or raw land on which you
• can develop your own vineyard?
• Do you want a house, the potential for a house or no house at all?
• Is there a particular variety of grape you want to grow?
• Is there a particular area you want to be in?
• Are you willing deal with difficult access or other issues?
• What are your minimum and/or maximum acreages?
• What is the maximum you can spend?

Once you have a rough idea what you want, you’ll know what properties
are worth evaluating or not.

3. Evaluating a vineyard property

Once you find a property that fits your requirements, you can start evaluating that particular parcel - but what makes land suitable for a vineyard? This is a subject that people discuss for hours and hours. To start with, it is easier to say what land isn’t suitable for planting.

1. Soils with slopes that exceed 50%.
2. Soils that don’t drain at all or contain vernal pools.
3. Land without an adequate source of water for irrigation.
4. Too high – Growing grapes above 2,500 feet is a special challenge
5. Too cold – Hard frosts (below 20 degrees) after February.
6. Too cool – This is a variety by variety decision.
7. Soils extremely high in Magnesium or extremely high in Calcium

Otherwise, grapes are a very adaptable plant and can grow just about anywhere.  But, if you are looking for an especially good site, here are things to keep in mind.

1. Hillside - 5% to 20% slope.
2. Rocky – the rockier the better, although it will making farming difficult.
3. Some altitude – between 1000 and 2000 feet.
4. Good sun exposure.
5. Well drained.
6. Volcanic soils - but any rocky, well drained soil will work.
7. Enough warmth every year to ripen grapes.

4. Pricing Vineyard Land

So, once you have evaluated a parcel and have decided it will work for you:

    What should you expect to pay?
    How much money can you expect to make?

The only way to talk about pricing vineyard land and not go crazy is to make some broad assumptions about the price per acre for established vineyard and plantable raw land. However, it is a very rare parcel that has only vineyard. Most parcels have houses or house sites or other improvements that complicate the process of coming up with a price.

Prices for vineyard land vary greatly depending on the location and quality of the site. Specific appellations like Napa Valley or Russian River demand premiums, areas without reputations don't.

In Sonoma County unplanted vineyard land goes for $50,000 to $100,000 per acre depending the quality of the area. Established vineyard goes for $100,000 to $150,000 per acre.

So for parcels that are entirely plantable land or established vineyard we are all done. But for the rest of the world, things get more complicated. We have some rough numbers we use to put a price on unplantable land and various other improvements:
    About $7,500 per acre for unplantable land
    About $100,000 for a basic house site
    About 250,000 for a fabulous house site
    About $200 per sq ft for existing houses
    About $100 per sq ft for existing outbuildings
    Plus any other improvements like wells and roads.

If is important to note that although these machinations will give you useful reference points, we've never seen a parcel's price match our computed value. Every parcel has at least one and usually several exceptional characteristics that alter its value.

5. How much money can I make?

Growing wine grapes is a business - a good business. Despite the uncertainties of the marketplace, unpredictability of the weather and the vagaries of farming, growing wine grapes can produce a good income year after year if the vineyard is well run and well marketed.

Fortunately, once the vineyard is in the ground, the costs to operate the vineyard from year to year are pretty predictable. It costs $2,500 to $3,500 and up per acre to farm every year. This includes all farming costs. Other costs, such as insurance and interest expense have to be considered separately. For some reason that I have never understood, the cost of harvesting is considered separately as well at about $150 per acre.

Grapes are sold by the ton and prices vary from area to area and from variety to variety. In 2000 in Sonoma County, the average price for a ton of grapes was just under $2,000. However, Russian River Pinot was going for $3,500 a ton while some Chardonnay was going for $1,200 a ton. You have to look carefully at the variety and the appellation to determine actual price per ton you can expect.

Tons per acre varies considerably from variety to variety and from high quality grapes to low quality grapes. You can get as many as 10 tons to the acre or more for some varieties at lower qualities. But in general, you should consider about 5 tons to the acre or less for high quality grapes of most varieties. Average yields for Pinot Noir will be a little lower and most white grape varieties a little higher.

So, for a typical Sonoma County red wine grape variety, if you figure $2,200 a ton and 5 tons to the acre you should get about $11,000 an acre in revenue. Take away our average of $3,000 in costs + $150 per acre for harvest and you get $7,850 per acre in net income.
 

6. Operating a vineyard

My husband and I have a vineyard and we love it. We love the vineyard, we love farming and we love the people we have gotten to know through growing grape vines. Despite all the headaches that come with any farming activity - we wouldn't trade our vineyard for any amount of money (OK, maybe there is a price...).

There are a wide variety of ways you can operate a vineyard. Many people that own vineyards hire managers to operate them have no involvement in the vineyard's operation other than writing and receiving checks and only visit their vineyards only the occasional weekends.

And at the other end of the spectrum there are many people that manage their vineyards themselves and spend a great deal of their time every day devoted to it.

It is important for you to decide how you are going to operate your vineyard.

7. Selling grapes to wineries

Courting wineries is a lot like lining up a date for the Prom. Right now there aren’t enough Sonoma County grapes to go around and wineries have to compete for available fruit. Take advantage and drop by wineries to talk about your vineyard. You’ll get lots of free stuff and maybe a free meal or two. But don’t let the hospitality snow you.

Matching a winery to your vineyard

Whether or not you know it, you have goals for your vineyard and for your grapes. It is important to set them out clearly. Goals for a vineyard can be things like:

Financial
Provide income when I retire
Provide extra income now
Provide a long term investment

The Grapes
Grow the highest quality grapes
Simply to live on a vineyard
Grow grapes in harmony with the land

The Wine
Be involved in making the best wine
Eventually make wine myself

If you goals are mostly financial, then you should look for one of the larger wineries whose standards aren’t quite as demanding, allows reasonable yields and who still pays top dollar. These larger wineries will allow you to keep your costs down and you revenues up. You can establish a long term relationship that you can have some confidence will last.

If your goals are related to wine, then you should look for wineries that share your attitudes about wine. This can be a fun process and should involve meeting a lot of winemakers and tasting a lot of wine. Typically you will be talking to smaller wineries that have a similar focus to your own.

If you want to eventually make your own wine, then find a winery that will allow you the greatest level of involvement in the process. Keep track of your juice and taste it as it travels from crush to fermentation to barrel to bottle. Most smaller wineries will welcome this kind of involvement from a grower.

Contracts

Most grape contracts are by the ton. Since you, as grower, have some control over the number of tons you grow, you can increase your income by raising your yields. But wineries want low yields because in general it means higher quality. Wineries will often limit your yield in your contract. Make sure that if your yields are severely limited, that you get a higher price per ton to compensate for it.

8. So I've decided to do it all myself - Developing a vineyard

Vineyard development costs fall into two basic categories - Those expenses that occur in every vineyard and those expenses that occur in some vineyards and not in others and vary according to the vineyard.

There is one basic decisions you have to make that will drive all the standard costs - how far apart to space your rows and vines. Spacing has been consistently dropping (and therefore vines per acre increasing) over the last 20 years from 8' by 12' being standard (450 vines to the acre) to the current standard of about 6' by 8' (900 vines to the acre). With the number of almost everything in the vineyard doubling, the cost has risen as well.

You should figure about $20,000 for standard costs of installing a vineyard. But, additional costs to deal with drainage, erosion, rocks, fencing, frost protection, engineering can run an additional $5,000 to $20,000 an acre.

Actual typical end cost per acre is $25,000 to $40,000 per acre.

There is a lot more information about developing vineyards at www.SonomaVineyardLand.com .

9. Selecting varieties and clones

The most important decision you'll have to make - one that you will have to live with for the life of your vineyard - is what varieties of grape to plant. But before we get into the different varieties, we should define a few terms.

Variety – For our discussion variety means a sub-species of vitus vinifera. All wine grapes grown in California are European in origin and from the family vitus vinifera. In addition to the most popular varieties like Cabernet Sauvignon, Chardonnay, merlot, Pinot Noir, Sauvignon Blanc, and Zinfandel there are many, many other varieties to choose from - several hundred as a matter of fact.

Clone – A clone is a genetically identical vine propagated by cuttings from one mother plant that was chosen because of some particularly desirable trait. In some varieties, there is not much difference between clones and in other varieties, like Pinot Noir, there are large differences.

Selection - A selection is vine material taken from a specific site. If you go into your neighbors vineyard during pruning and collect bud wood from plants that you particularly like you have a "selection".

Rootstock – Although Vitus Vinifera is generally considered the best grapes for making wine, it is highly susceptible to several diseases native to North America. So, to get Vitus Vinifera varieties to grow in North America, you have to graft them onto rootstocks that are created from crosses of North American native species that are resistant to those diseases. There are a variety of rootstocks suited to different situations and it is far, far beyond the scope of this to go into them. Suffice it to say that you will need an expert advising you on the rootstocks that will work best at your site with your varieties.

Varieties

So no that we know our terms, we can talk about the different varieties. Although there are hundreds of varieties of wine grapes to choose from, unless you have a passion for one of the obscure ones, there are really one a few practical choices. Each is suited to one or two different climate and they are listed below by the preference for heat.

Hottest - Napa, Alexander Valley
Cabernet Sauvignon

Moderate - Most of Sonoma
Zinfandel
Merlot
Syrah
Sauvignon Blanc

Coolest - Russian River, Carneros
Pinot Noir
Chardonnay
Sauvignon Blanc

10. Financial models of vineyard ownership

There are lots and lots of ways to look at vineyard ownership from a financial perspective but most of the perspectives in use today have a few things in common

1. They do not load the expense side with land debt.
2. They do not leverage the cost of installing the vineyard.
3. They are conservative on their costs and income.
4. They do not expect income until the fourth year.

Accounting for a vineyard is a very specific activity requiring special knowledge. You should get a good accountant and/or tax attorney familiar with vineyards.

11. Useless wine facts

Dollars per ton for grapes - $2,000
Barrels per ton - 2.9
Barrels per acre (at 5 tons to the acre) - 14.4
Cases per barrel - 23
Cases per acre - 335
Dollars per case for grapes - $36

Dollars for winemaking per case - $12
Dollars for materials per case (box, bottle, foil, cork, label) - $15
Total cost per case - $63
Cost per bottle - $4.64
Glasses per bottle - 5
Cost per glass - <$1.00

12. Making your own wine

Some people have vineyards because they like to grow grapes and are perfectly happy having someone else turn those grapes in to wine. Other people grow grapes because THEY WANT TO MAKE WINE.

Making your own wine is actually a lot of fun even if it never sees the light of day. There are lots and lots of good books on wine making and there are good courses on wine making at the local junior colleges and short courses at UC Davis.

If you are going to grow wine grapes, then making your own wine is a great way to understand how the winery perceives your grapes and it also allows you to see how good a job the winery is doing turning your grapes into wine.

The amount of equipment required to make wine at home is really quite simple:

1. Grape crusher – can be rented
2. Press – can be rented
3. Fermentation vessel – food grade garbage can
4. Thief (like  a turkey baster)
5. Hydrometer with beaker
6. Aging containers – beer kegs, glass carboys, old wine barrels
7. Assorted chemicals – soda ash, meta-bisulphate, citric acid
8. PH, SO2, titrate test kits
9. Grapes

It’s best to make your first batch with someone that has some experience, but if that’s not available, then just jump in and try it yourself. If you don’t have any grapes yet, there are lots of places in the North Bay you can get grapes. Just ask around before harvest for unpicked blocks of second crop (what's left after harvest).

13. Other sources of information

There is a great article written by Rhonda Smith of UC Ag Extension worth reading by anyone interested in a vineyard that you can get to by clicking here.

There a variety of text books mostly of dubious quality. Sunlight Into Wine is the most recommended.

Ready to find out what properties are available right now?

Do you want us to keep you informed as properties you
are interested in become available?

Back to Home Page