In an insightful talk at the recent Vineyard Economics Seminar, Tony Correia, the respected assessor for vineyard land, made interesting observations. One, a “global land grab” of unprecedented magnitude is occurring. “People gotta eat,” he pointed out.
Or drink, in the case of wine. But he added, “when development of vineyards and/or orchards is highly profitable, land values will increase to absorb that component of profitability. Increasing land values will eventually challenge the financial feasibility of new developments.”
He noted, for example, that while prime open land in Rutherford and Oakville in Napa County sells for $100,000 to $175,000 per acre, with some cult properties or estates going higher to $300,000, secondary land sells for $50,000 to $100,000. Outlying areas sell for $25,000 to $50,000 per acre. They all were $25,000 to $40,000 in 1994.
But little open land suitable and legal for vineyards is available, especially here in Napa County.
So prices are $225,000 to $300,000 for prime land, $100,000 to $225,000 for secondary vineyards and $50,000 to $100,000 for outlying vineyards.
Meanwhile, strong demand, higher grape prices and long-term contract offers are prompting new vineyard plantings, including replanting of less productive vineyards.
Yet competition for land (for other uses in many markets outside Napa Valley, at least) is driving land prices higher and good land is increasingly difficult to find. In addition, well-heeled wineries are buying land at a ferocious rate, though mostly in cheaper areas outside Napa Valley.
Correia concludes, “Late-comers to the planting mania party may face inflated land values that will eventually end the feasibility of new developments. Scarcity of good land (and water) will drive late-comers toward marginal ground, which may prove less productive, and may suffer more when the market turns,” as it inevitably will.
Napa Valley Wine Academy offers courses at St. Supéry
The Napa Valley Wine Academy is now offering its Wine & Spirit Education Trust (WSET) certification courses at St. Supéry Estate Vineyards & Winery in Rutherford. To register or learn more, visit napavalleywineacademy.com.
Organic Winegrowing Conference
The 2013 Organic Winegrowing Conference organized by the Napa Valley Grapegrowers will be on Thursday, July 25 at Spottswoode Estate Vineyard & Winery from 8 a.m. to 2:30 p.m.
The event offers insight and networking about sustainable and organic farming practices. Registration is $175 ($125 for Grapegrower members) and it always sells out. Get more information and register at NapaGrowers.org.
Bloggers Conference 2014 in Santa Barbara
The 2014 Wine Bloggers Conference is July 11-13 in “Sideways” country, Santa Barbara County. It will be the seventh Wine Bloggers Conference, and will be returning to California for the first time since 2009. Approximately 400 wine bloggers and others involved with the new media of wine are expected to attend, organizers say. Get more information at WineBloggersConference.org.
Wine Industry Technology Symposium
The 2013 Wine Industry Technology Symposium returns to Napa Valley July 15 and 16. The event at the Napa Valley Marriott & Spa focuses on computer technology used in the wine business. Early bird cost is $150 for one day, $250 for both. Details are at WineIndustryTechnologySymposium.com.
Email Paul Franson at firstname.lastname@example.org.