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June 29, 2018

Viticulture & Wine Production Grow Influence & Impact on U.S. Agriculture

Grape growers in several states, including California, contribute to America’s successful wine industry.

Viticulture – also known as the cultivation of grapevines – is thriving across the U.S., supported by the country’s increasing interest in wine and positive wine industry growth trends.

According to Rob McMillan, executive vice president and founder of Silicon Valley Bank’s Wine Division, the American wine industry “has experienced long-term trends of increasing volumes and higher prices, with only minor flattening periods during recessions.” In fact, 790 million gallons of wine were consumed in the U.S. in 2016 – that’s an increase of more than 420 million gallons since 1993.

California’s Viticulture & Wine Industry Impact on U.S. Agricultural Economy

California is America’s top wine producer, making 81 percent of all U.S. wine and is currently the world’s fourth leading wine producer after France, Italy and Spain. The state’s wine shipments in the U.S. reached an estimated retail value of $35.2 billion in 2017, up 3 percent from the year before. California wine sales to all markets – including shipments across the U.S. and exports worldwide – were 278 million cases in 2017. Of the nation’s $1.5 billion in wine exports, more than 90 percent were from California.

In addition, California is home to 5,900 wine grape growers, and grapes are the state’s 3rd largest commodity in terms of cash receipts. Its wine industry is a major employer, creating 325,000 jobs across the state and 786,000 jobs nationwide. The economic impact is also significant – California’s wine industry had a state economic impact of $57.6 billion and a national economic impact of $114 billion in 2016.

Unsurprisingly, owning vineyards in California could lead to healthy profits. Wine grapes in the Central Valley generally gross $3,750 per acre with good production, and Sonoma County red wine grape vineyard owners typically gross $5,580 per acre in net income.

Increase in Vineyards & Wine Production Continues Across the U.S.

Beyond California, other states are also contributing to the nation’s viticulture and wine industry growth and success.

For example, Washington – the second-largest premium wine producer in the U.S. – is home to more than 940 wineries and over 350 wine grape growers. Wine operations cover more than 55,000 acres, and the state produces nearly 70 wine varieties as well as approximately 17.5 million cases of wine annually.

New York has a strong wine industry, too, with 1,631 family vineyards, more than 400 wineries and 175 million bottles of wine produced each year.

With 774 wineries, Oregon is another player in the U.S. wine industry. According to the Oregon Wine Board, there are over 17,000 wine-related jobs across the state.

Finally, Texas’ wine industry is growing and flourishing as well. The state wine and wine grape industry has 104,267 full-time jobs paying $4.3 billion in total wages. Texas includes 436 wineries and four American Viticultural Areas, defined as delimited grape-growing regions with distinguishing features, a name, and a delineated boundary.

AgAmerica Lending’s spectrum of financial solutions can provide the right financing for vineyards across the United States. Contact us today to learn more about how our team of land loan experts can help you prepare you operation for a strong, healthy financial future.

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