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02.19.2014  
 

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Impact of New York wine industry climbs to $4.8 billion; lawmaker looks to secure funding for vineyards damaged by cold

 
by Linda Jones McKee
 
 
John Parducci
 
The vineyards at Swedish Hill Winery dropped to -11° and -15°F on Jan. 22. U.S. Sen. Charles Schumer of New York is working to secure federal grants for growers whose vineyards were damaged.
Canandaigua, N.Y.—In the midst of a cold and snowy winter, New York grapegrowers and winemakers received some good news this week related to the condition of a different kind of climate—the wine business climate. On Feb. 18, the New York Wine and Grape Foundation reported the results of a new study showing that New York grapes, grape juice and wine have an impact on the state’s economy totaling $4.8 billion. Jim Trezise, president of the New York Wine and Grape Foundation told Wines & Vines, “We’re very pleased, but not totally surprised, as the wine industry has been growing rapidly, and the growth has accelerated since 2011, when Gov. Andrew Cuomo took office.”

Stonebridge Research Group of Napa, Calif., utilized data from 2012 to update previous studies done in New York in 2005 and 2008. According to Trezise, Stonebridge used “a combination of in-depth interviews with industry members, publicly available data from government sources and the ‘IMPLAN’ model for economic analysis, which uses input-output analyses and tables for more than 500 industries to estimate regional and industry-specific economic impacts of a specific industry. The model includes ‘direct’ effects such as employment at wineries, ‘indirect’ effects such as the economic benefits to suppliers of the industry and ‘induced’ effects such as workers spending their income in local businesses.”

From 2008 to 2012, the total economic impact of the New York wine industry rose from $3.76 billion to $4.8 billion. The number of wineries is now at 320; there are 37,000 acres of grapes; winery revenue is almost $553 million, and wages paid were more than $1.14 billion. The value of New York grape sales rose from $36.5 million in 2008 to $52.25 million in 2012, and the retail value of grape juice products in the same time frame went from $32.7 million to $71.6 million.

New York wine industry growth has resulted in a 20% increase in the number of full-time employees between 2008 and 2012, even though that time period is often referred to as the “great recession.” The number of part-time and seasonal workers has increased as well.

“We’re delighted and proud of the industry,” Trezise stated, “and we’re grateful for the support of the New York state government. We have to have a good business climate as well as a good climate for grape growing to keep the wine industry accelerating.”

Senator seeks aid for New York grape growers
It has been 10 years since grapegrowers in the Northeast have seen such a harsh winter, with sub-zero temperatures threatening not just the potential for grapes next fall but the ultimate survival of the vines themselves. Rather than sit back and wait to see how bad the damage is, U.S. Sen. Charles Schumer is moving proactively to secure federal grants and loans to help growers whose vineyards may have been severely damaged by the winter’s frigid temperatures.

On Feb. 17, Schumer held press conferences at three wineries from the Finger Lakes region in central New York to Chautauqua County near Lake Erie. The wineries included the Pleasant Valley/Great Western Winery in Hammondsport, Steuben County; Three Brothers Wineries and & Estates in Geneva, and 21 Brix Winery in Portland, Chautauqua County. Schumer suggested that U.S. secretary of agriculture Thomas Vilsack should begin now to take steps to help vineyard owners. If a natural disaster were to be declared, that would allow the Department of Agriculture to provide low-cost loans for replanting vineyards damaged by the arctic temperatures.

Another source of assistance is the Tree Assistance Program, part of the recently passed Farm Bill.  Known as TAP, this program provides financial assistance to commercial grape growers for vine replacement as well as to orchardists for replanting trees.

Based on the impact of cold temperatures in 2004, Schumer estimated that wine production losses are up to $42 million. Because of the wine industry’s impact on other related businesses such as tourism, the cold temperatures could impact associated businesses other than vineyards and wineries.

The full extent of the damage won’t be known until summer, when the effect on vine trunks will become more apparent. Vineyards planted with vinifera varieties such as Riesling, Chardonnay and Cabernet Franc are more cold sensitive than those planted with either hybrids such as Vidal and Vignoles or native varieties like Concord and Niagara.

David Peterson, owner of Swedish Hill Vineyard in Romulus, N.Y. (between Seneca and Cayuga Lakes), told Wines & Vines that the coldest temperatures at Swedish Hill were between -11° and -15°F on Jan. 22. It was not quite as cold at Peterson’s vineyard at his Penguin Bay Winery in Hector, N.Y., which is located in the Finger Lakes “banana belt” southeast of Seneca Lake. Temperatures there dropped to -7° to -8°F. “We know we had major damage, between 205 and 60%, and maybe worse than that,” Peterson reported.

Trezise was somewhat optimistic. “Vines are tough,” he said, “and so are growers. We’ll get through this one. It will help that Sen. Schumer has been proactive in letting USDA know that the New York industry may need help.”
 

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