Economic impact of grapevine trunk disease management in Sauvignon Blanc vineyards of New Zealand
Mark Sosnowski1 and Greg McCarthy2
1South Australian Research & Development Institute 2Sutton McCarthy Limited
Summary
Economic analysis to provide decision support for managing grapevine trunk diseases was funded by NZW with co-funding from the New Zealand Ministry for Primary Industries Sustainable Farming Fund. Based on results from trunk disease surveys and preventative wound treatment trials, the analysis showed that early adoption of preventative wound treatments in vineyards will minimise the cost of trunk disease and provide future benefit over the life of a vineyard. If preventative treatment does not commence until after trunk disease is evident, there will be costs for future crop loss and remediating or replacing vines. The sooner the remediation treatment is commenced, the greater the future benefit. The potential “national” value of an effective annual spray treatment to the New Zealand industry is estimated to be at least $20m per annum, increasing by a further $20m per annum when combined with remediation treatments.
Introduction
Eutypa and botryosphaeria dieback are major grapevine trunk diseases worldwide, causing significant yield and quality reduction. They threaten the sustainability of New Zealand vineyards and are becoming an increasing problem as vineyards age. Trunk pathogens infect vines through pruning wounds, colonise woody tissue and cause dieback (Fig 1), typically observed as a dark wedge-shaped or central staining of tissue in cross-section (Fig 2).
The Eutypa lata fungal pathogen produces toxic metabolites which are translocated to the foliage, causing stunted shoots, necrotic and distorted leaves (Fig 3), reduced bunch size and uneven ripening. Management of trunk diseases is based on remedial strategies: removing infected wood material and retraining new shoots (Fig 4), re-grafting or replacing vines and preventative strategies: protecting against infection by treating pruning wounds by hand or with a tractor driven sprayer (Fig 5).
Economic analysis was undertaken to quantify and express the economic impact of trunk disease on a typical New Zealand vineyard where no preventative or remedial treatments are employed (the baseline) and thereafter assess the relative cost/benefit of various possible preventative or remedial treatment responses. A financial model was developed to compare trunk disease related scenarios, based on data derived from a vineyard survey in the Hawke’s Bay and Marlborough regions. Although economic drivers vary considerably between vineyards and varieties, and are dependent on crop volumes and market grape prices, this study aimed to provide a cost/benefit framework that informs a grower’s consideration of trunk disease management strategies.
Model assumptions
The model was based on a hypothetical 1 ha of cane-pruned Sauvignon Blanc vineyard over a 40-year period, which targets an annual crop of 12.4 tonnes per hectare with a market value of $1,750 per tonne. Whilst the cost of preventative and remedial treatments could be estimated with reasonable accuracy, the benefit of avoiding future crop losses by reducing the incidence of trunk disease related to multiple future years and was initially relatively small in value, but increased over time. Accordingly, assessment of this financial cost/benefit required net present value (NPV) analysis of projected future costs. The cost of spray applications was estimated at $120 per hectare. To hand paint in a vineyard planted at 2,220 vines per hectare, it was estimated to cost $230 per hectare (cane-pruned) or $460 per hectare (cordon-pruned). The model assumed the impact of disease on the crop was solely volume related. It did not take into account any reduction in fruit quality/value or financial benefit where climatic factors result in crop tonnage overages that potentially mitigate the financial impact of trunk disease in these years. In a hypothetical situation where spray treatment applied from planting was 100% effective, the “cost” would be the actual cost of the annual treatment and the “benefit” would be the avoidance of crop loss that would otherwise result from disease, and there will be no need to remove and replace or rework and graft diseased vines. Where the treatment was less than 100% effective, the “benefit” was the estimated reduction of crop loss, and where disease symptoms were subsequently identified in the vineyard, calculations were undertaken in the model to reflect the relative financial difference between treatment responses commenced at that time.
Model outputs
Annual preventative treatments
The model indicated the relative financial difference between doing nothing and the annual preventative treatments of hand painting or spraying pruning wounds, commencing from when the vineyard was first planted. If preventative treatments were 90% effective, the cost was recovered by approximately year 12 (spray) and year 16 (hand paint) and thereafter the NPV benefit significantly exceeded the cost If the treatments were only 50% effective, the “breakeven point” would push out to approximately year 16 (spray) and year 22 (hand paint), still providing a long-term NPV benefit.
Remedial treatment responses
The model also determined the likely relative financial difference between six possible treatment response scenarios in the vineyard. It calculated the annualised NPV future relative costs for each treatment response, for existing trunk disease incidence scenarios that ranged from 0% to 100%. This provided a relative future cost profile for each treatment (calculated from any particular incidence level) and assisted identification of the lowest future cost response. The NPV future cost of reworking or regrafting all vines in the hypothetical vineyard was calculated as $4,700 per hectare per annum, and for removing and replacing all vines was $6,700 per hectare per annum. These costs are constant, regardless of the level of existing trunk disease at the time of treatment. As an example, we could consider a vineyard exhibiting 10% disease incidence, which would represent an average vineyard age of 14 years: If the grower does nothing, there will be an NPV future cost of $2,600 per hectare per annum over a 40-year-period, albeit the actual impact will be lesser in earlier years and greater in later years. If the grower commences an annual spray treatment regime at 14 years, there will be an NPV future cost of $2,000 per hectare per annum, being $600 per hectare per annum better than doing nothing. If the grower removes and replaces the symptomatic vines at year 14 and thereafter undertakes an annual spray treatment regime, there will be an NPV future cost of $1,600 per hectare per annum, being $1000 per hectare per annum better than doing nothing and $400 per hectare per annum better than only undertaking the annual spray treatment. The NPV future cost of reworking or regrafting symptomatic vines is expected to be marginally less again at $1,500 per hectare per annum. The general conclusions drawn from the model were: The NPV future benefit of reducing the impact of trunk disease via an annual spray treatment regime was greater than its NPV future cost, until the vineyard was approximately 80–90% diseased. Thereafter, the value of preventing future new disease was minimal. Once trunk disease was relatively established (between 10 and 80% incidence), the best results were achieved by a combination of removing and replacing or reworking and regrafting diseased vines, followed by the application of an annual spray regime. Once incidence of trunk disease reached 50%, the NPV future benefit of removing and replacing all vines followed by the application of an annual spray regime, was greater than the cost of doing so, albeit this would not be as cost effective as reworking/regrafting or removing/replacing symptomatic vines. Wholesale remediation or replacement of a vineyard was more cost-effective than treating symptomatic vines only once at least 80% of vines became symptomatic.
Industry impact of trunk disease management
The results of this economic analysis indicated the NPV future benefit of reducing the impact of trunk disease over the productive life of a vineyard via the application of an annual spray treatment is considerably greater than the cost of treatments. The actual cost/benefit will vary by vineyard age, existing trunk disease infection levels, adopted pruning regime and grape variety. Notwithstanding the spray treatment regime introduces an additional annual cost from commencement, the model indicates that the approximate NPV future benefit could be in the order of: $700 per hectare per annum over the productive life of the vineyard if the annual spray regime commences from when the vineyard is first planted; or $550 per hectare per annum over the remaining productive life of the vineyard if the annual spray regime commences before the vineyard is 60% diseased. When combined with other corrective treatments such as vine replacement or regrafting, incremental benefits of up to $600 per hectare per annum might be achieved in vineyards with up to 10% incidence, increasing to approximately $3,000 per hectare per annum in vineyards with 50% incidence. New Zealand currently has approximately 35,500 hectares of land in vineyard production. The average incidence of disease dieback observed in Hawke’s Bay and Marlborough was approximately 9%. The potential “national” value of an effective annual spray treatment to the industry is therefore currently estimated to be approximately $20m per annum, increasing by a further $20m per annum when combined with other corrective treatments as above.
Conclusion
New Zealand Winegrowers research has evaluated the effectiveness of post-pruning spray applications, which protect pruning wounds from infection by airborne fungal spores, thereby reducing the incidence of trunk disease. This treatment is less labour intensive and less expensive than manually handpainting pruning wounds. While efficacy is influenced by the skill of the operator and efficacy of the spray equipment, it also has the potential to deliver a more uniform treatment outcome. Whatever treatment regime is adopted, the timing of when it is first commenced has a significant bearing on the potential economic impact of trunk disease on the vineyard. If a preventative treatment is commenced from when the vineyard is first planted, the incidence of trunk disease and consequential crop loss is likely to be minimised over the medium to long term. Increased costs are incurred when applying the preventative treatment in early years in order to reduce crop losses and the need for regrafting or removing vines in later years, thereby improving future revenues and avoiding future costs. If a preventative treatment does not commence until after trunk disease is evident, there will be future crop loss associated with diseased vines, including vines with latent infection yet to present, which may ultimately lead to the need to regraft or remove and replace these vines. Notwithstanding this, commencing treatment at this point will limit further infection and thereby mitigate the overall impact, as above. Given most New Zealand vineyards have not employed preventative treatment regimes from when first planted, this analysis has sought to provide economic analysis to assist the consideration of various treatment alternatives for vineyards of all ages with a range of different disease incidence levels. Based on the model outputs, it is reasonable to conclude that the sooner a preventative treatment is commenced, the greater the NPV future benefit that will be achieved, compared to doing nothing. The project is continuing from 2017 as part of the Vineyard Ecosystems Programme to optimise wound protection strategies by examining spore dispersal, wound susceptibility and the critical timing of fungicide application.
This article first appeared in the June/July 2017 issue of the New Zealand Winegrower Magazine.
