Home' Grower : April 2010 Contents 1
The South Australian Grower -- April 2010
Riverland battles falling
prices as profits vanish
By ERIC CUMMINS
THE Riverland winegrape
region, generally accepted as
Australia's biggest producer
by volume of popular premium
winegrapes, is having another
challenging season that will result
in a reduced crush.
The region covers some 22,000
hectares and despite continuing
difficulties, particularly for grow-
ers, accounts for up to 25 per cent
of the national crush.
Some of the larger wineries in
the region are making moves to
restructure their businesses,
including cutting back on their
fruit intakes, while some of the
boutiques have 'gone quiet' as
others continue to prosper.
The larger players in the region
account for about half the fruit
intake while the smaller wineries
that are doing well help maintain
tourism and fly the flag for the
Last year, there was a cr ush of
about 400,000 tonnes but the
2010 season is likely to result in a
fall to about 300,000t, according
to Riverland Wine Industry
Council industrial development
officer Tim Smythe.
"We have had a challenging sea-
son so far with heat last
November, which had a big
impact in putting vines under
stress, followed by more heat in
January on the heels of four years
of drought," Mr Smythe said.
"Last year, the water allocation
was at 18pc while this year it's
55pc and this is having an enor-
mous impact on growers whose
vines are being maintained on a
"This situation alters the cost
structure in operating vineyards
because growers have to buy
water, usually when they are
already in a situation of not mak-
ing any money and having to add
to their debt."
Until recently there were about
1200 winegrape growers in the
Riverland but they are exiting the
industr y in numbers and about
180 are believed to have taken
exit grants from horticulture
recently -- the majority of them
from the wine industry.
Because of their economic cir-
cumstances, some winegrape
growers had deliberately reduced
their fr uit yields, particularly for
chardonnay, and had been forced
to tighten their belts, Mr Smythe
The anticipated reduction in
yields had slightly improved the
outlook for prices which, at the
start of the season, were expected
to be up to 30pc lower because of
a forecast high national crush.
"This means that growers who
previously did not have a sale for
their fruit may receive higher
prices than they originally expect-
ed but not enough to offset other
cost factors," Mr Smythe said.
"We have had rain throughout
the season so far, which has
reduced the need for separate irri-
gation, but the general mood of
winegrape growers is one of dis-
Details: Riverland Wine Industry Council
08 8582 2952
Grape prices may improve
Wineries reduce intakes
Harvest down 25pc
AT A GLANCE
Growers face 'cost' dilemma
ROCK bottom grape prices and
drastically reduced winery intakes
continue to slash vineyard viability,
with many Riverland growers handing
on by the slimmest of margins.
Grapegrower Lindsay Dowley
(pictured) says he is reconsidering
his future in the industry -- and he is
"I was telling a rural counsellor that
this will be my last year unless prices
increase to a minimum of $500 a
tonne and he said 'you and about 80
per cent of other Riverland growers',"
Mr Dowley said. "There won't be
anyone left to grow grapes."
Mr Dowley is the chairman of the
Riverland Vine Improvement
Association, and grows 13 varieties of
winegrapes on 30 hectares of
vineyards at Loxton North in South
Mr Dowley said the prices he was
being paid were already at rock
bottom. "I paid my harvesting bill
last week and have just received my
first payment for 48 tonnes of
chardonnay but I've got to wait until
June to recover my costs and at
least 50pc of this will go in
harvesting costs," he said.
The chardonnay is part of a
contract with Foster's for 200 tonnes
but the price is paid in thirds.
Mr Dowley said consideration for
the needs of growers had been taken
away and it was now too expensive
to employ too many people.
"The good pickers that you want
are no longer in the industry
whereas four to five years ago they
could earn $250 a day and I only had
to employ three of them," he said.
"If we don't get decent prices this
year there won't be anybody left
and for sale signs are already going
up on blocks of about 10ha.
In Mr Dowley's case he is thinking
of going on a pension and not even
applying for an exit package.
"It's not worth going for an exist
package -- you have to vacate your
block, pay tax on what you get and
one bloke was only going to get
Details: Lindsay Dowley 0429 841 412
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