Valley farmers eye the benefits of adding grapes to their mix of crops
- October 1, 2008
by Heather B. Hayes
John Higgs likes to say that he has apples in his genes. He spent his childhood picking them at his family’s 33-acre orchard in Fishersville. “My father’s passion was apples,” he says. “He always tried to produce the best possible apple he could in terms of taste and sweetness.”
Higgs inherited the abandoned orchard in the late 1990s when he returned to the Shenandoah Valley after a long career in government contracting. But he didn’t try to restore the property to the nostalgic orchard of his youth. Pushing sentiment aside, he instead razed the trees to plant a 6-acre vineyard and open a winery in a restored apple barn.
Higgs and his wife, Shelby, opened Barren Ridge Vineyards earlier this year and soon will be turning out 2,500 cases of wine annually. “In a way, I felt like I was walking away from something special,” says Higgs. “But the reality is that I never would have gone into the apple business again because I didn’t think it was a very good business plan. Grapes were a much better fit.”
High gas prices, inflation and new competition from global markets are putting more pressure on the profit margins of traditional Shenandoah Valley agricultural operations such as apple orchards. As a result, farmers increasingly are looking at alternative crops, products and services that allow them to increase revenues and bolster their bottom line. Grapes rank high on the list of possibilities.
“All agricultural operations have been very hard hit by high fuel prices and grain inflation,” says Robin Sullenberger, CEO of the Shenandoah Valley Partnership, a regional economic development organization based in Harrisburg. “Farming in the traditional way has become extremely challenging in today’s global marketplace, and farmers are now much, much more business-oriented and management-oriented.”
For many farmers, that new attitude means rotating something new into their crop mix. Some farmers are growing fruits and vegetables to sell directly to local markets, while others are planting horse-quality hay to sell in higher-end markets. Some are getting into agri-tourism, hosting events on their property. And still others are increasing their production of corn, wheat and soybeans or planting Christmas and nursery trees.
Tony K. Wolf, director of the Alson H. Smith Jr. Agricultural Research and Extension Center and a professor of viticulture at Virginia Tech, says that he is getting more inquiries about growing grapes in the region. “How many people are actually taking that next step and getting into it, I’m not sure as I don’t usually get a follow-up,” he says. “But people are definitely looking at it.”
Trying to stay on the land
Grapes, proponents say, are a beneficial Shenandoah Valley crop because they offer a high yield using a relatively small number of acres. A 20-acre vineyard, in fact, is considered sizeable. And, with their deep roots, grapes actually thrive in dry conditions, not a trivial matter as droughts have become increasingly prevalent in Virginia in the past 10 years.
“If you think about it as a portfolio of assets, something like grapes allows a farmer to diversify his assets and hedge his investments,” says Jim Benefiel, a grape-grower who leases land from Marker Miller Orchards in Winchester. “Last year was probably the worst drought in 20 years. But the vineyards had a great year, while other farmers were really hurting. So this way, if one product wasn’t doing quite as well, they might be having a bumper crop in something else.”
John Marker, owner of Marker Miller Orchard, was thinking of making a change — taking some of his apple trees out of production and devoting the land to grapes — when Benefiel approached him. “I realized that there was such a tremendous learning curve involved, so this way I figured I’d learn with Jim,” Marker says.
When the lease on the property expires in 2010, Marker has the option to take over the vineyards, Benefiel notes. “This gives him a chance to observe me doing this, and then he can make a decision as to whether he wants to convert more of his land to grapes and get into this business.”
Diversifying into grapes also can provide some security for farmers in transitional markets in the Shenandoah Valley and other parts of Virginia. For example, Charlotte County farmer Kevin Trent began replacing a portion of his tobacco crop with grapes five years ago. He now has 10 acres in vines on his Southern Virginia farm and may plant more in the future. “The tobacco market had become so unpredictable and the changes were coming so fast that we got a little nervous about our future,” he says. “We felt that investing in something else would allow us to stay on the land and work the land because we didn’t know what was going to happen with tobacco.”
A long-term Investment
Grape-growing, however, is hardly a panacea. Grapes are more labor-intensive than many agricultural pursuits and require a large upfront outlay of time and money. Estimates range from $12,000 to $15,000 per acre, not including the cost of the land. Vines require at least three years before they yield fruit and even more time to reach full commercial production levels.
And Virginia doesn’t offer the easiest climate for grapes, says Rock Stephens, president of the Virginia Vineyards Association. Last year, a late frost cost grape-growers in some areas as much as 80 percent of their crop, and other vineyards had damage from hail storms.
Diane Kerns, treasurer of Fruit Hill Orchard, a commercial apple grower in Winchester, says that she and other company officials considered diversifying into grapes. As the apple market has globalized and profits have declined, her company has slowly begun taking trees out of production. Company officials discussed planting a vineyard with a horticultural consultant specializing in grapes, but they nixed the idea.
“It would require a significant capital investment for us that we were not willing to make,” Kerns says, noting the move would have necessitated buying new equipment and setting up an irrigation system. “We’re instead looking at things that are less capital-intensive, like corn, wheat, beans, nursery trees and even just fencing in pasture and leasing it out to horse-people.”
Clearly, grape-growing is not for everyone, but that should not deter those with passion and patience, says Benefiel. “If you’re willing to put in those kind of long-term investments, grapes will yield a better return than a lot of crops,” he says. “It’s just that you’ve got to look at it as a 15- to 20-year return. If you’re looking to make a quick and easy return on your money, there are easier ways to do that.”
Grape-growers also have the opportunity to take the next step, moving into winemaking. Especially attractive is recently passed legislation allowing wineries to offer “custom crush” services to vineyard owners. They can “rent” winery equipment to produce, bottle and sell their own wines.
The ability to move up the value chain without investing $1 million or more in a winery likely will make grape-growing more attractive for Shenandoah Valley farmers who are land-rich but cash-poor. “You’re looking at getting $1,400 a ton for grapes but $20 for a bottle of wine, which is 8 to 10 times as much,” says Stephens.
Unlike soybeans or tobacco or even apples, grapes also have the added advantage of character, which gives growers a marketing edge. Grapes are sensitive to their environment and to the viticultural practices of the grower, “so the Cabernet Sauvignon that you grow is going to taste just a little bit different from any other Cabernet Sauvignon,” Higgs says. “So whatever I produce is going to be unique, and people that like it will seek out and pay extra for that uniqueness.”
Higgs notes as well a less tangible payoff to the grape and winery business. “There’s a romance and a lifestyle and a satisfaction to growing grapes that is different from anything else,” he says. “It makes all the hard work worth it.”