Abstract
Grapevine red blotch disease (GRBD) is a recently-recognized viral disease found across some of the major grapegrowing regions in the United States. Vineyard managers were surveyed to (i) estimate the economic impact of GRBD on Vitis vinifera cv. Cabernet Sauvignon in Napa and Sonoma Counties in California and on V. vinifera cv. Merlot in eastern Washington and Long Island in New York, and (ii) to identify cost-minimizing management strategies under various disease incidence rates, price penalties for suboptimal fruit composition, timing of disease onset relative to vineyard age, and costs of control. The economic cost of GRBD was estimated to range from $2213/ha in eastern Washington, when disease onset occurs at a low initial infection level and there is a low price penalty, to $68,548/ha in Napa County, when initial infection rates and quality penalties are both high. Our results further suggest that roguing symptomatic vines and replanting with clean vines derived from virus-tested stocks minimize losses if GRBD incidence is low to moderate (below 30%), while a full vineyard replacement should be pursued if disease incidence is higher, generally above 30%. These findings should help vineyard managers in the four examined viticultural regions adopt optimal GRBD management strategies.
Grapevine red blotch disease (GRBD) is a recently recognized viral disease of grapevine (Sudarshana et al. 2015). This disease was first described in 2008 on Cabernet Sauvignon in California (Calvi 2011). Grapevine red blotch-associated virus (GRBaV) was found in diseased vines and shown to be graft transmissible (Al Rwahnih et al. 2013). Surveys revealed the presence of GRBaV in numerous grapegrowing regions across the United States (Krenz et al. 2014), and propagation material was identified as a key driver of virus dissemination across the country (Sudarshana et al. 2015).
Leaves of GRBaV-infected vines exhibit intervenal red discoloration in red-berried cultivars and irregular pale green to yellow areas in white-berried cultivars. GRBD affects fruit composition with low (2 to 4 Brix reduction) or stalled sugar accumulation, poor skin color, and a diminished overall flavor complexity attributed to reduced total anthocyanins, phenolics, and tannins (Sudarshana et al. 2015, personal communications from vineyard managers surveyed in this study, 2015).
Given the recent discovery of GRBaV (Sudarshana et al. 2015), little information is available on cost-minimizing management strategies under various disease incidence levels, price penalties for suboptimal fruit composition, timing of disease onset relative to vineyard age, and control costs. Recent research on grapevine leafroll disease highlighted the usefulness of such economic studies to guide selection of the optimal disease management strategy (Walker et al. 2004, Atallah et al. 2012, Ricketts et al. 2015). Economic costs of leafroll were estimated at $29,902 to $226,405/ha over the ~25 year lifespan of a vineyard in California (Ricketts et al. 2015). Roguing and replanting symptomatic vines was recommended to minimize losses when leafroll disease occurred at low (5 to 10%) levels of infection. Above 25% infection, replacing the entire vineyard was the optimal management strategy (Ricketts et al. 2015). A similar study in the Finger Lakes region of New York estimated a significant reduction of impacts through roguing and replanting if initial leafroll disease incidence rates were low to moderate (1 to 25%) (Atallah et al. 2012).
Empirical research on the economic cost of GRBD in the vineyard is lacking. Here, we report our efforts to estimate the economic impact of GRBD and identify cost-minimizing disease management strategies in California (Napa and Sonoma Counties), New York, and Washington.
Materials and Methods
Surveys
With the assistance of local university extension educators, growers whose vineyards experienced GRBD in recent years in California, New York, and Washington were identified and surveyed (Supplemental Appendix 1). Buyers were also surveyed to determine the quality characteristics and price differential (penalties) associated with low-quality grapes across a range of indicators. Survey interviews were conducted in March (California), April (Washington), and May (New York) 2015. In California, parameters specific to Cabernet Sauvignon were evaluated because this cultivar exhibits noticeable GRBD symptoms and severe quality changes have been reported widely in the State. In Washington and New York, a majority of growers experienced GRBD infection in Merlot; thus, we used this cultivar in running simulations for those states.
Thirty-two vineyard managers participated in the study: 20 in California (10 each in Napa and Sonoma), eight in Washington, and four in New York. All vineyard managers queried faced unique levels of GRBD incidence within vineyard blocks and among vineyards. The small sample sizes in Washington and New York represented nearly all known vineyards currently affected by GRBD. Vineyard managers were asked to describe initial disease incidence (verified infection status through laboratory testing or visual symptoms alone), disease history, sourcing and planting strategies, and yield and quality impacts. They were asked to respond based on their experiences with, and management of, one to three infected vineyard blocks. Critical parameters of our analysis included production costs, yields, costs of GRBD management, prices, and discount rates (Table 1).
Critical model parameters used to evaluate GRBD treatment strategies.
Conditions for rejection and alternative markets for fruit low in sugar, high in acidity, or possessing substandard color were discussed with vineyard managers and buyers and used to develop reasonable scenarios of disease impact and the development of realistic disease management options for a 1-ha vineyard block with a 25-year lifespan.
Parameters included in the model
GRBD incidence
Cost models with initial disease incidence rates of 5, 15, 30, and 60% were developed to determine the threshold that warrants a change in GRBD control strategy in each study region.
Spread of GRBD
At the time of this study, literature on the annual spread (i.e., rate) of GRBD was not available and no GRBaV vector of epidemiological importance had been identified, although Spissistilus festinus (Say), the alfalfa treehopper, was reported as a vector when this article was in revision (Bahder et al. 2016). Since data on spread was missing at the beginning of this study, disease progression was modeled throughout the vineyard lifespan by assuming that infected planting material was the initial source of the virus, which may or may not subsequently spread throughout the vineyard block via a vector. In this case, disease symptoms such as red leaves and low accumulated soluble solids occur early, in year three, and the disease progresses as previously asymptomatic but infected young vines begin to manifest visual symptoms at an increasing annual rate of 5% (see below). Second, disease management was modeled in an established, older vineyard. In this case, visual GRBD symptoms are not expressed until years eight and 10. The profitability of late-term management strategies was modeled to understand whether such strategies might change when GRBaV infection, either latent or previously undiagnosed, occurs late in the life of the vineyard.
Quality and yield impacts
With little empirical research on GRBD impacts available at the time of the study, reports from vineyard managers about perceived and actual impacts that affect sale price and overall profitability were used to assess quality and yield impacts. Because vineyard managers rarely described meaningful reductions in yield, we assumed no reductions of yields due to GRBD for this study. Rather, vineyard managers described varying economic impacts due to reduced fruit quality, including various objective and subjective quality thresholds relating to sugar, color, and flavor development. For many growers, any combination of lower-than average soluble solids (Brix), poor color, and lack of complexity (flavor) can reduce negotiating power during harvest and impose a penalty for Cabernet Sauvignon (Napa/Sonoma) or Merlot (New York/Washington) prices. Three typical quality penalty levels (25, 50, and 100%) were evaluated for the proportion of low-quality, diseased fruit.
Methods of GRBD control
Survey respondents in all four regions commonly pointed to one of three strategies for managing GRBD. They included a baseline of doing nothing and leaving GRBD unmanaged, roguing and replacing individual (symptomatic) vines, and entire vineyard replacement. The economic cost of these disease management strategies was evaluated in this study. A small number of managers discussed pursuing chemical treatments for potential vector control, but because little was known about vector transmission at the time of this study, we did not examine the efficacy or cost of pesticide treatment.
Linking reduced incidence level and overall disease spread with a specific management practice required us to root our assumptions in the current understanding of GRBD. By using a 5% annual rate of spread (i.e., a constant increment of 5% per year), we assumed that initial high rates of infection occur primarily through contaminated planting material and that, if vector-transmission is occurring, virus spread is inefficient in most instances (i.e., it spreads slowly).
Addressing roguing and replanting symptomatic vines, we assumed that roguing efficiently reduces annual disease incidence levels by 50%. Thus, even if managers remove all symptomatic vines, GRBD would not be completely eradicated, given latent infection and/or vector transmission.
A strategy of total vineyard replacement upon reaching a threshold level of GRBD infection was examined using production costs outlined in the University of California Cooperative Extension’s Vineyard Establishment Cost Study for Napa County (Cooper et al. 2012) and Sonoma County (Smith et al. 2010). Since disease onset in years three, eight, and 10 were examined, the overall cost of vineyard replacement included total vineyard removal and planting costs, cultural costs and interest, preparation costs (soil amendments, marking and laying out of vineyard), and cover crop. We assumed that trellising and irrigation were salvaged (Table 1). No data on production costs were available for eastern Washington and Long Island; therefore, we relied on information provided by vineyard managers (see below).
Strategies and scenarios to assess optimal GRBD control
Multiple scenarios were employed to assess the impact of three disease management strategies, including take no action, rogue symptomatic vines and replant, and vineyard replacement. Scenarios consisted of a combination of 1) time of disease onset (early onset in year three and late onset in years eight and 10); 2) initial infection incidence (5, 15, 30, or 60%); and 3) price quality penalties (25, 50, or 100%). The term “initial infection” is used to designate the initial rate of visually symptomatic vines during the year of disease onset.
Under each scenario combination, we evaluated the net-present value (NPV) of each disease management strategy, taking into account the associated control cost and yield impacts for each region (Table 1). The NPV of the disease management strategy was then compared to that of a ‘no GRBD management’ baseline while considering the minimization of the economic impact of the disease through different management strategies. Ultimately, a decision matrix based on the currently available empirical information was developed for each region for vineyard managers seeking to optimize disease management strategies under various disease scenarios.
Scenarios to assess GRBD impact
Three scenarios were used to assess disease impact.
Scenario 1: GRBD progression with no disease control
Under the ‘no control’ strategy, GRBD spread is based on an assumption of latency/transmission of 5% annually, as previously discussed. The economic impacts for these scenarios estimated how alternative initial disease incidence and price penalties influence optimal disease management decisions.
Scenario 2: Roguing and replanting
Under the ‘roguing and replanting’ strategy, roguing symptomatic vines is done after vines start showing symptoms (year three in early disease onset scenarios and years eight to 10 in late disease onset scenarios). Because some infected vines are asymptomatic, we assumed that roguing and replanting reduces disease incidence by only 50% each year and that the disease is never eradicated but kept at a 1% infection level at best. We used a roguing and replanting cost of $14.60 per vine, which includes materials and labor costs, based on the UC Davis Integrated Pest Management Guidelines and other relevant guidelines (Varela et al. 2015).
Scenario 3: Full vineyard replacement
The ‘full vineyard replacement’ strategy mimics a managerial decision to replant the entire vineyard at the onset of symptoms. Survey outputs suggested that vineyard managers pursued this strategy for several reasons, including concern about the current or future quality of GRBD-infected grapes and a desire to eliminate or minimize possible virus spread to asymptomatic vines. The economic impact incurred from a full vineyard replacement was used as benchmark to identify the threshold for switching disease management strategies.
Economic analysis
The economic impacts were derived using an NPV analysis. This analysis was used to calculate and compare alternative investments with varying costs and the resulting cash flows of these investments over time. A positive NPV suggests that the investment cost has been recouped and provided a return on investment. A negative NPV suggests that when cash flows from an investment decision are discounted back to current-day dollars, the investment cost has not been recouped and the endeavor is unprofitable. In this study, we evaluated how ‘investments’ in alternative disease management strategies compare over the economic lifetime of a vineyard (25 years).
The NPV of various GRBD management strategies is a function of the annual quantity of grapes produced/ha (metric tons; tm), the incidence of GRBD infection, the annual costs of producing grapes and managing GRBD, and the regional price of grapes/tm across a 25-year vineyard lifespan. The discount rate was held constant at 5.57%. The economic impact of GRBD under various scenarios was calculated as the difference between the NPV of a healthy vineyard and the NPVs of vineyards under different disease management strategies. The economically optimal disease management strategy was identified as the one that minimized the NPV difference (economic impact) between a healthy vineyard and a diseased vineyard for each scenario.
Winegrape production cost data available at the start of this study (Smith et al. 2010, Cooper et al. 2012) were augmented and verified by our 2015 survey, in which we collected information on actual prices paid, average yields, and other relevant information (Supplemental Appendix 1). The cost study values for Napa and Sonoma are in 2012 and 2010 dollars, respectively; these values were adjusted for inflation by an increase of 2.8% (Napa) and 8.3% (Sonoma) to reflect 2015 dollars (U.S. Department of Labor 2015). Average prices for Cabernet Sauvignon for Napa and Sonoma Counties were identified in the 2014 Crush Report published jointly by the California Department of Food and Agriculture of the United States Department of Agriculture (CDFA/USDA 2015).
Since formal cost studies were not available for winegrape production in Washington, average cost data reported by eastern Washington growers and Washington State University extension collaborators was collected. Average prices for Merlot in Washington were taken from the 2014 Washington Wine Grape Release, collected by the National Agricultural Statistics Service (USDA/NASS 2015). For production cost data, the model used averages collected by vineyard managers and extension advisors in eastern Washington, including Horse Heaven Hills, Yakima Valley, and south-central Columbia Valley.
As in eastern Washington, there were no recent formal cost studies New York’s Long Island region. Therefore, production costs for Long Island were extrapolated from a recent upstate New York cost study (Yeh et al. 2014). This information was augmented and verified by findings from our 2015 survey, during which we collected additional information from survey participants (vineyard managers) in Long Island on actual prices paid, average yields, and other relevant information (Supplemental Appendix 1). Average land cost data were collected from vineyard managers and extension agents working in the North Fork/Long Island region. Average prices paid for Merlot in 2014 were generated from our 2015 survey of Long Island vineyard managers and verified by regional and local extension agents.
Results
Regional viticultural characteristics
California red wine production is one of the most important agricultural commodities in a state with one of the largest and most important agriculture sectors in the country. Cabernet Sauvignon is one of the most important cultivars in the state, comprising 12.3% of total winegrape acreage, second only to Chardonnay at 17.2% (CDFA/USDA 2015). Although Napa and Sonoma Counties have substantially smaller annual production than other regions in the state (110,677 and 130,505 tm in 2014, respectively), these counties are famous for producing grapes of superior quality with unique flavor and quality profiles (CDFA/USDA 2015). Increasing demand for Cabernet Sauvignon elevated prices in 2014: Napa-grown Cabernet Sauvignon averaged $5275/tm and Sonoma-grown Cabernet Sauvignon, $2319 (CDFA/USDA 2015). Elevated demand for Cabernet Sauvignon, reflected in high average prices under current market conditions, presents an interesting question about the implications for managers facing GRBD. On the one hand, North Coast vineyard managers in Napa and Sonoma Counties report very high demand for Cabernet Sauvignon grown in the North Coast, particularly in Napa Valley, in the past year. Because of North Coast Cabernet Sauvignon supply constraints, buyers often had little incentive to enforce extreme quality penalties on growers. On the other hand, growers also indicated that reduced quality associated with GRBD forced them to find different buyers, perhaps outside the region. For estate bottling operations or vertically-integrated winemaking companies, infected grapes might be rechanneled to a bottling program with more flexible standards. The effects of GRBD were especially calamitous for vineyard blocks that were earmarked for high-tier, quality-driven bottling programs and buyers.
The winegrape industry in Washington continues to expand and mature. Over 17,785 ha were dedicated to winegrape production in 2011, with over 3332 ha planted with Merlot (USDA/NASS 2013). Out of 205,930 tm harvested in 2014, Merlot accounted for 33,475 (~16%) (USDA/NASS 2015). In 2014, prices for Merlot averaged $1076/tm, continuing a slight price increase since 2009 (USDA/NASS 2015).
Red wine grape production in New York’s Suffolk County (North Fork, Long Island) covers 826 ha and produces 5,464 tm of Merlot annually. In 2011, Merlot production represented over 30% of plantings in the region (USDA/NASS 2013). In our 2015 survey, participating growers reported an average 2014 sale price of $1814/tm.
Modeling disease spread
Using a rate of 5% annual disease spread in the simulations, starting with a 5% initial infection in year three (the first year where visual symptoms become apparent to a vineyard manager), disease incidence in a vineyard in each region will reach a value of almost 70% in year 25. A higher initial incidence of 30 or 60% will reach a total value of 77 or 87%, respectively, in year 25.
Economic impact
Creating a baseline of ‘no disease control’ in each of the four study regions revealed a large range of losses due to quality impacts of GRBD (Table 2). These economic impacts range from $2213/ha in eastern Washington for a 5% initial disease rate with a 25% price penalty, to $68,548/ha in Napa County with an initial 60% disease prevalence level and a 100% price penalty for the proportion of infected grapes (Table 2). For baseline economic impact scenarios evaluating late-onset of GRBD and a subsequent ‘no management’ strategy, the per-hectare economic impacts for disease onset in years eight and 10 were similarly varied (Table 3). They ranged from a low of $1123/ha in eastern Washington with an initial infection of 5% and a 25% price penalty, to as high as $20,629/ha in Napa County with 30% initial disease level during year eight and a 100% quality penalty. Optimal disease management strategies were identified for different scenarios and each region (Table 3).
Economic impact of grapevine red blotch disease “no-control” baseline assuming a 5% annual spread under different initial disease incidence rates (5, 15, 30, or 60%) and price penalties (0, 25, 50, or 100%) for diseased fruit, beginning in year three.
Grapevine red blotch disease (GRBD) control decision matrix: Optimal strategies and associated cost-savings compared to a “no GRBD control” strategy.
Napa County, California
Overall impact
In Napa County, penalties for lower-than-expected quality Cabernet Sauvignon fruit due to GRBD infection can result in significant losses for vineyard managers. The economic impact of GRBD under “no management” scenarios with an annual spread of 5% ranged from $8855/ha (5% initial disease level in year three and a 25% price penalty) to $68,548/ha (60% initial incidence in year three and a 100% price penalty) (Table 3).
Optimal management strategies for early disease onset in year three
For the lower quality penalty scenario (25%), roguing and replanting is the optimal strategy when initial disease incidence levels in year three are low (1 to 12%) (Table 3). Under this scenario, roguing and replanting saves $3290/ha more than ‘doing nothing’. Beyond an initial infection level of 12%, however, the control costs and yield-loss implications of roguing and replanting outweigh the costs of not managing the disease and absorbing the quality penalty of 25%. Thus, when managers are faced with a 25% quality penalty and an initial infection level of 12% or more, not managing GRBD is optimal (Table 3).
In Napa County, scenarios describing substantial price penalties, however, warrant roguing and replanting or occasionally a full vineyard replacement. When large price penalties are combined with high initial incidence level, full vineyard replacement becomes the optimal strategy. For example, when faced with a 50% price penalty, roguing and replanting is optimal when the initial infection level in year three is ≤52%. When initial GRBD disease prevalence is 15% in year three, cost-savings associated with roguing and replanting versus doing nothing are $8784 and $28,781/ha when the price penalties are 50 and 100%, respectively (Table 3).
Beyond a 52% initial infection, vineyard managers should pursue total vineyard replacement. For example, when initial infection is 60% and when facing a price penalty of 50 or 100%, the savings associated with pursuing a full vineyard replant versus doing nothing are $10,601 and $44,310/ha, respectively. We designated this finding as “Napa’s Red Blotch Rule of 50s,” and suggest that beyond a 50% initial infection and when facing a 50% price penalty for infected grapes, complete vineyard replacement is always optimal (Table 3).
Optimal management strategies for late disease-onset in years eight and 10
Roguing and replanting is an efficient management response, regardless of the price penalty incurred, if the initial disease onset in years eight and 10 is ≤5%. When faced with a 50% price penalty, associated cost-savings under a strategy of roguing and replanting in year eight and 10 are $5570 and $3783/ha. With a 100% price penalty, the savings associated with roguing and replanting are $15,465 and $11,446/ha when compared to doing nothing at all (Table 3).
When GRBD occurs late in the life of the vineyard, total vineyard replacement should be considered only when the initial GRBD prevalence is >15% and when the quality penalty for infected grapes is very high (100%). Cost-savings associated with full vineyard replacement versus a ‘no action’ strategy in these scenarios are $15,574 and $11,347/ha for years eight and 10, respectively, under a price penalty of 100% (Table 3).
The optimality of these management strategies should be interpreted with caution. These optimization models rest on the assumption that price penalties issued for GRBD will remain constant throughout the life of the vineyard, if the disease is left unmanaged. This may or may not occur. For example, one year a vineyard might receive a 25% price penalty due to a proportion of low quality grapes, but the next year, a 100% price penalty may be incurred or the contract may be revoked.
Sonoma County, California
Overall impact
In Sonoma County, the economic impact of GRBD, when left unmanaged, ranges from $4866/ha (25% price penalty and 5% initial infection at year three) to $37,663/ha (100% price penalty and an initial incidence prevalence level of 60% in year three) (Table 3).
Optimal management strategies for early disease onset in year three
When faced with low price penalties (25% reduction or less), it is optimal to rogue and replant at lower rates of initial infection (1 to 5%), which saves ~$1557/ha compared to a strategy of doing nothing. Beyond an initial infection of 5%, it is optimal to not manage GRBD. However, when price penalties increase to 50% or more, the optimal choice is either roguing and replanting individual vines or replacing the entire vineyard. At price penalties of 50 or 100%, the optimal strategy for managing GRBD shifts from roguing and replanting (when infection levels are initially between 1 to 45%) to full vineyard replacement when the initial infection rate is >45%. In both of these extreme price penalty scenarios, it is never optimal to do nothing, regardless of the initial infection level.
Optimal management strategies for late disease onset in years eight and 10
When faced with a lower price penalty (1 to 25%), the optimal strategy is ‘no control’ if disease onset occurs in either year eight or year 10. When facing higher price penalties (50%), it is optimal to rogue and replant until disease incidence reaches ~20 to 30%. Beyond this point, it is optimal to replace the entire vineyard. Full vineyard replacement can offer significant cost-savings for late disease onset. For example, a full vineyard replacement in year eight (with an initial disease incidence of 30% and a price penalty of 100%) can save $10,031/ha. Cost-savings associated with roguing and replanting range from $1562/ha (initial disease incidence of 15% in year 10 and a price penalty of 50%) to $6895/ha (initial disease incidence in year 10 is between 1 to 5% with a 100% price penalty).
Vineyard replacement after year 10 is significantly more expensive than if it occurs in any prior year. This is due to the assumption that beyond year 10, trellising and irrigation are not salvaged and must be replaced. This cost of replacement is the reason for the dramatic decrease in cost savings in year 10 when compared to the savings associated with vineyard replacement in year eight.
Eastern Washington
Overall impact
If growers in eastern Washington are faced with a GRBD-related price penalty, the economic impacts range from $2213/ha when year three starts with a 5% disease prevalence and a 25% price penalty, to $15,840/ha when a manager faces a 100% price penalty for the proportion of diseased grapes under an initial incidence scenario of 60% (Table 3).
Optimal management strategies for early disease onset in year three
Managers facing a low price penalty (1 to 25%) can optimize profitability by pursuing a ‘no management’ strategy in response to the disease. The costs and yield reductions associated with roguing and replanting GRBD-affected vines or total vineyard replacement do not outweigh the relatively small economic losses incurred by absorbing a relatively small price penalty (Table 3).
When price penalties increase, optimal management strategies subsequently shift. If price penalties are 50% or higher, the optimal management response is to rogue and replant at low disease incidence levels (5 to 7%). At higher price penalties, the optimal strategy is full vineyard replacement. Total vineyard replacement should be considered when the initial disease incidence exceeds 30% and when price penalties are above 50%. With a 100% price penalty scenario, the critical infection level window for switching between roguing and replanting (optimal at an initial disease level of 1 to 14%) to replacing the entire vineyard is an initial infection level of ~15%. At an initial infection level above 30%, the per-hectare savings associated with full vineyard replacement ($5702/ha) outweighs savings associated with ‘no control’ and other disease management strategies. With a 100% price penalty, it is never optimal to pursue a strategy of ‘no management’ (Table 3).
Optimal management strategies for late disease onset in years eight and 10
With a price penalty of 1 to 25% and disease onset in years eight and 10, vineyard managers in eastern Washington can minimize GRBD-related economic losses by not managing the disease (Table 3). Even when disease onset occurs in year eight with a 50% price penalty, ‘no management’ should be pursued as a strategy if the initial disease level is between 1 to 30%. However, in years eight and 10, if the price penalty increases to 100%, it is optimal to replace the entire vineyard when the initial infection prevalence is above 15%. Under these conditions, this strategy saves $1861/ha when disease onset occurs in year eight and $145/ha when disease onset occurs in year 10 (Table 3).
When a 100% price penalty occurs with a disease onset in year eight, roguing and replanting should only be pursued at low initial disease incidence levels (1 to 6%). Above this incidence, full vineyard replacement should be pursued (Table 3). The costs of full vineyard replacement greatly increase in year 10 due to the assumption that infrastructure cannot be salvaged. Thus, a ‘no management’ strategy remains cost-effective at higher rates of initial infection in year 10. With a 25% price penalty, no control of the disease is always optimal with disease onset at year 10. When the price penalty increases to 50%, no control is economically optimal, until an initial disease incidence of ~60% or higher, thus justifying full vineyard replacement. With a 100% price penalty, roguing and replanting is the optimal strategy until initial disease incidence exceeds 27%. Thereafter, full vineyard replacement is economically justified.
Long Island, New York
Overall impact
The economic impact of GRBD in Long Island ranges from $2665/ha for a 5% initial infection and a 25% price penalty to $20,629/ha when initial GRBD incidence is 60% and managers face a 100% reduction in price for the proportion of diseased grapes (Table 3).
Optimal management strategies for early disease onset in year three
When price penalties for infected grapes are low (25%), roguing and replanting is the optimal strategy until an initial infection level of ~7%. When initial disease levels are between 1 to 5%, roguing and replanting saves $505/ha when producers are faced with a 25% price penalty, to more than $8,222/ha with a 100% price penalty. Beyond a 30% initial disease incidence and under a price penalty scenario of between 50 and 100%, total vineyard replacement minimizes the economic loss imparted by GRBD, saving $1657 or $8768/ha, respectively.
Many scenarios exist under which Long Island growers optimize profitability under disease conditions by not managing GRBD. Notably, most of these situations occur under low (25% or less) price penalties. At price penalties of 25% or less and an initial disease incidence level of 7%, it is economically preferable to not control the disease. When a low price penalty is experienced, vineyard replacement becomes a more economically favorable option than ‘no control’ only if the initial incidence is above 70% (Table 3).
Optimal management strategies for late disease onset in years eight and 10
With a lower price penalty of 25%, the economic losses associated with late onset of GRBD in years eight and 10 are minimized when a strategy of ‘no control’ is pursued. This finding holds regardless of the initial disease prevalence (Table 3). With a higher price penalty of 50%, roguing and replanting becomes economically favorable to all other strategies when the initial incidence level ranges from 1 to ~20%, and from 1 to ~15% for onset in years eight or 10, respectively. If disease onset occurs in year eight and the initial disease level exceeds 20%, full vineyard replacement is optimal (Table 3).
Discussion
The economic impact of GRBD, a relatively newly recognized viral disease, was evaluated in this study for vineyard managers in California, New York, and Washington. Economic losses to GRBD are estimated to range from $2213/ha in eastern Washington, when disease onset occurs at a low initial incidence level and low price penalty, to $68,548/ha in Napa County, when producers face a high initial disease incidence and a large price penalty.
To evaluate the overall economic impact and identify optimal disease management strategies, we employed an NPV analysis similar to studies looking at cost-minimizing management of leafroll disease (Walker et al. 2004, Freeborough and Burger 2008, Atallah et al. 2012, Ricketts et al. 2015). Vineyard managers in our survey pointed out that, in contrast to leafroll disease, they are not experiencing yield reductions due to GRBD: instead, infected vines produce poor-quality grapes that generate price penalties. Under four different initial disease onset levels (5, 15, 30, or 60%), three different strategies for disease management were compared in light of the three price penalty levels (25, 50, or 100%) typically faced by growers managing vineyards with GRBD. These strategies included roguing and replanting diseased vines, full vineyard replacement, and no action.
Perhaps unsurprisingly, we found a negative relationship between a GRBD-related price penalty and the threshold for changing management practices to optimize vineyard profitability. Broadly speaking, at low levels of infection (1 to 5%), roguing and replanting is relatively inexpensive compared to absorbing any penalty cost. This finding holds across all regions except eastern Washington, where prices are much lower than in the other studied regions. Conversely, at higher levels of initial infection and higher price penalties, the disease threshold for vineyard replacement versus roguing and replanting is markedly lower. At a price penalty of 50% or greater, the disease threshold for considering a full vineyard replacement differs by region, with Napa having the lowest disease tolerance threshold (15 to 22%), followed by eastern Washington (15 to 30%), New York (30%), and Sonoma (45%). On average, when the quality penalty is over 50%, the threshold for switching from roguing and replanting symptomatic vines to full vineyard replacement occurs at an initial infection of ~30%. This finding holds true despite the year of initial disease onset (Table 3).
The four viticultural regions evaluated in this study had diverse climate, production costs, winegrape varieties, and markets targeted. Buyers in each region appeared to have varying levels of concern with GRBD, and thus associated quality impacts and penalties differ. This is especially true for estate-bottled vineyard operators, who may simply channel GRBD-infected fruit into a lower-tier bottling program, or dilute their supply of GRBD-infected fruit by distributing diseased fruit among several bottling programs. To accommodate these strategies and perspectives, this study employed a wide range of GRBD-induced price penalties.
In Napa County, high-quality Cabernet Sauvignon vineyards producing for a premium market that become infected with GRBD can face greater scrutiny by buyers who are unwilling to compromise and accept varying levels of quality. Growers may experience abrupt or immediate quality-related GRBD price penalties (as modeled in this study) for the proportion of diseased grapes in the vineyard. Equally important is that Napa and Sonoma County growers may risk long-term damage to their reputations for growing high-quality grapes, which can be an extremely important marketing advantage and critical to negotiating favorable contract terms. For these reasons, Napa and Sonoma County growers may have a greater incentive to replace vineyards earlier, rather than wait for a high-enough infection level and price penalty to push them to act. In the short term, some growers in Napa and Sonoma County pointed out that they may pursue a buyer who is outside of the North Coast region who may be willing to accept lower-quality grapes for the chance to market a product from a notable production region. Because this study focused on changes in production practices, it did not consider scenarios that encompass changes in marketing practices, but attempted to incorporate these economic losses (e.g., transportation costs) throughout a wide range of GRBD quality-related price reductions. A future study should consider how shifts in markets, marketing strategies, and regional margins might translate more precisely to economic impacts and which management strategies are optimal under various outbreak scenarios.
In eastern Washington, no management of GRBD is an optimal strategy under a range of initial disease incidence levels when the price penalty is low (less than 25%). In eastern Washington, both buyers and growers are less concerned about GRBD than other diseases affecting the industry, so incentives to manage GRBD are muted. The biggest impact for eastern Washington growers will likely be changes in sourcing planting material for establishing new vineyards, a decision aided by quarantine regulations imposed on out-of-state planting materials.
Based on uncertainties in the identification of a vector to explain disease spread, growers in Long Island, New York (and in other regions evaluated) remarked that replanting schedules have slowed or been delayed. Our work suggests that particularly in Long Island, vineyard managers should not delay roguing and replanting when facing lower levels of disease incidence and higher price penalties. When a GRBD-price related penalty of 50% or more is incurred, it is almost always preferable to rogue and replant when the disease onset is between 5 to 15%. Above 30% infection rates and when facing a high quality penalty, vineyard replacement is the optimal solution.
Conclusions
This study estimated the economic impact and optimal management responses for vineyard managers facing a recently recognized virus disease for which limited information on its biology and ecology is available. Evaluating the optimal disease management option under a given scenario helps vineyard managers identify a threshold for altering strategies to reduce or minimize economic losses. Better management guidelines that are specific to regional costs, context, and disease incidence levels are essential to ensure a profitable vineyard and a thriving winegrape industry.
There is still much to learn about GRBD. Consequently, the results outlined in this paper should be interpreted within the context of our assumptions. Our analysis assumed the establishment and enforcement of consistent GRBD-related price penalties over the life of the vineyard for early (year three) and late (years eight and 10) disease onset. Depending on the buyer, the market pursued, the regional grape supply and demand, and other factors, a constant quality-impact price penalty may or may not be realistic. In addition, quality-related impacts are generally not enforced uniformly across regions and penalties may not necessarily be enforced every year. There is evidence that quality issues related to GRBD vary depending on spatial location in the vineyard, presence of other diseases, weather, and precipitation, among other factors. Future research to improve the assumptions of GRBD-impact could estimate the annual variation around GRBD-related quality impacts and randomize price penalties over the 25-year lifespan of a vineyard. Improved understanding of the epidemiological features of the disease such as spatiotemporal distribution of infected vines and the nature of the vector would also improve our economic modeling of spread scenarios.
Acknowledgments
The authors are grateful to the vineyard managers who enthusiastically participated in the survey. This research was supported in part by a grant from the USDA-APHIS National Clean Plant Network.
Footnotes
Supplemental data is freely available with the online version of this article at www.ajevonline.org.
- Received January 2016.
- Revision received May 2016.
- Accepted August 2016.
- ©2017 by the American Society for Enology and Viticulture
Vol 68 Issue 1
