N.Y. Grape Growers Vote Down Research Order

Why did that happen? What will the New York wine and grape industry do next?

by Linda Jones McKee
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Different priorities between wine grape growers and juice grape growers may have lead to the failure of the proposed market order to raise research funding.

Albany, N.Y.—A proposed market order to raise funding for research to support the New York grape industry failed in a vote decided by not just the number of votes but also how those votes represent the tonnage of grapes produced in the state.

A total of 336 ballots were received: 197 (representing 59% of the votes cast and 50,457.1 tons) were in favor and 139 (representing 41% of the votes and 50,661.7 tons) were against the market order. According to the criteria for passage, 51% of the votes in favor needed to represent 65% of the tons produced for the market order to pass; 50,457.1 tons was just under 50%.

On Sept. 15 Sam Filler, executive director of the NYWGF, announced in the foundation’s newsletter that the order did not pass.

In his comments, Filler noted that at meetings held during the summer “a good portion of our industry believes that whether grapes go into juice, wine or other consumer products, sound science is key to improving the quality of the fruit and production of the finished product. Some advances gained through research also help growers and winemakers run a more cost effective and efficient operation, thereby yielding a stronger bottom line for the farm operation. These types of advancements are truly seen as an investment in the farm as well as the future of the industry.”

In 2016, three New York wine and grape organizations — the New York Wine and Grape Foundation (NYWGF), the New York State Wine Grape Growers and the Lake Erie Regional Grape Program, Inc. — petitioned the N.Y. State Department of Agriculture and Markets (NYSDAM) to create a statewide “Grape Research and Development Order.” The purpose of the market order was to provide a grower-supported, grower-funded and grower-led funding stream for grape research in the state.

Initial meetings with growers took place in November 2016 and six additional public meetings were held by the NYSDAM in five regions of New York during June and July to explain the market order and its funding mechanism. More than 1,400 growers were eligible to vote, with the ballots due in Albany by Sept. 8.

What happened?
Why didn’t the order pass? When asked by Wines & Vines Filler said: “We have a lot of different types of grape growers in New York — juice, vinifera, hybrids. So regionally, growers have different priorities. It would be easy to point a finger at the grape growers in the Lake Erie region (who voted against the market order in greater numbers), but that’s not the answer.”

New York’s grape diversity is reflected in the fact that the state’s six American Viticultural Areas — the Finger Lakes, Lake Erie, Long Island, Hudson River, Niagara Escarpment, and Champlain Valley — grow 30 major grape varieties on 33,000 acres, which reflects more different grape varieties and growing conditions than in many other grape growing areas.

As Filler points out, the regions in New York have circumstances that require different responses. For example, native varieties such as Concord and Niagara are still grown on thousands of acres in the Lake Erie region. However, those grapes command considerably lower prices than wine grapes grown in the Finger Lakes.

The recently published price list for Finger Lakes grapes reported Niagara grapes selling for $308 per ton and Concord for $285 per ton, while Chardonnay, the lowest priced vinifera variety, was priced at $1,386 per ton and Pinot Noir, the highest, was at $1,870 per ton. The low prices for native grapes, combined with a reduction in demand for grape juice, may be reasons for Lake Erie growers to see a need for dollars for marketing, not for research. Other growers of native grapes may feel they are not making enough profit to be able to afford even a relatively low contribution to the market order.

Another factor affecting the outcome of the vote may have been the size of many of the state’s wineries. While there are now more than 400 wineries in New York, according to WinesVines Analytics, 116 wineries produce less than 1,000 cases of wine per year, and another 151 wineries produce between 1,000 and 4,999 cases. In other words, two-thirds of the wineries produce fewer than 5,000 cases, and they, too, may feel an economic pinch.

A separate issue may have been the composition of the advisory board that was set up to approve the research and extension projects and to administer the market order. The board was to consist of seven growers (three from the Lake Erie region, and one each from the Finger Lakes, Hudson Valley, Long Island and the North Country regions), one processor of juice grapes (who would probably come from the Lake Erie region) and one processor of wine grapes.

Some growers in the Finger Lakes felt that the advisory board was weighted toward Lake Erie, and that the state’s largest wine grape region should have more than one seat. In addition, while the North Country region had a seat on the board, growers there were not sure that their research needs for cold climate varieties would be met.

Going forward
Filler noted that Finger Lakes growers feel strongly about moving forward, and there is already an active dialogue among them on finding research funding alternatives. The challenge, he said, is to determine “what is the best mechanism for the various segments of the industry, because one-size-fits-all doesn’t work for N.Y. But we need to figure out how to get a consensus among growers on an funding approach or approaches that a majority can support.”

Another avenue to consider is New York’s wine excise tax, which brings in several million dollars to the state treasury. “The wine industry is subject to an excise tax, which is not true for apples,” Filler said. “Several growers have suggested that the state should use the excise tax for wine research. This cuts across all regions; wine growers and producers may see it [the market order] as double taxation. We need to have conversations in each region about what is best for their region. Then we need to let industry take the leadership role.”

Art Hunt, owner of Hunt Country Vineyards in Branchport, N.Y., said what works for wine grape growers may not be the same for juice growers and noted many juice grape growers already belong to the National Grape Cooperative Association, which has its own research fund. “I’m disappointed,” Hunt said, “but I can understand why [the market order was turned down]. We may need to do something just for wine grapes.”

Scott Osborn, owner of Fox Run Vineyards in Penn Yan, N.Y., said the order’s defeat endangers future research. “It’s really sad. I know things are tight, but we’re losing our researchers. Alan Lakso, Andrew Landers, Wayne Wilcox are all retiring, and may not be replaced by people for our industry,” he said. “We’re going to miss out on future research — we have to figure out how to get funds for that research. Maybe we can take money from the wine excise taxes and give it to Cornell for research. The money’s already collected; it’s not a new tax.”

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