Irrigation water pricing remains the key to profitability for winegrape growers, providing them with a source of income and opportunity as winegrape prices predicted to stagnate. Riverina Winegrape Growers is encouraging its member growers to closely monitor their water budgets as dry conditions continue and use the opportunity now to communicate with their winegrape buyers to ascertain the grape prices for the 2020 Vintage.
Riverina Winegrape Growers has a number of excellent tools available for growers to look at the input cost of water and balance these against the price offers of regional wineries. This will allow growers to do their homework and understand their profitability for each grape block ahead of the 2020 vintage. Growers should contact our office to discuss the software that is freely available.
Riverina Winegrape Growers Chief Executive Officer Brian Simpson stated, “Staff in our office can assist members with the software program that is available and very easy to use. The water budgeting tools were developed during the millennium drought and are even more relevant today, particularly for those growers that need to purchase water. Importantly it can be a tool if winegrape prices are known growers can see what the opportunity cost is of growing winegrapes or reducing yields and trading water on the market.”
Temporary water prices are again on the rise within the region as many general security irrigators struggle with low starting allocations. Riverina Winegrape Growers are concerned for the many winegrape producers that do not hold sufficient allocation to grow a viable crop and must enter the water market to purchase their allocation to bring a crop in. Early knowledge of the viability of doing this will assist the industry come to terms with its profitability. Winegrapes are no longer the most profitable crop in the region.
In the Riverina average water use in winegrapes remains around 4.5 megalitres per hectare which is among the most efficient across the inland regions. Mr Simpson said, “At a modest temporary purchase price of $500 per ML the cost per hectare of growing grapes for water alone is around $2,250 per hectare. At a regional average yield for 14 tonnes per hectare it equates to around $160 per tonne in water alone and then you need to add in costs of pumping the water and the fixed and delivery charges it could be well over $200 per tonne. When you line that up against winegrape prices for some white varieties last season it is greater than half the value. We want to ensure that growers do the sums and remain profitable and not just produce grapes and lose money.”
Riverina Winegrape Growers is encouraging wineries to announce prices early so that growers can better managed their financial situation and outlook.
