Production profitability analysis: an update from the Expert Review

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Bennett Haynes
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1 Production profitability analysis: an update from the Expert Review The analysis estimated growing costs by region and by grade, and compared with actual prices paid. Growing costs per tonne by grade were estimated using the following data sources: prices dispersion data from Australian Wine and Grape Authority (note that price dispersion data including bonuses would only be available in Oct/Nov). Limitations of the price dispersion data include: 1) Price dispersion data is based on winegrape purchases only and therefore does not account for winery-owned fruit; 2) Tonnages purchased and reported at the aggregate level are estimated to represent an estimated 80% of the total purchases Average yield by region was based on 2006/08/10/12/14. Yield estimates were from SA Winegrape Crush Survey (PGIBSA) and consultations with WGGA Estimated cost per hectare figures from consultations with WGGA and CPI movement Definitions of profitability levels are as follows: o - growing costs (per tonne) are greater than purchase price (per tonne) o - profit per tonne is between $0-100 o - profit per tonne is between $ o - profit per tonne is above $300 An updated production profitability analysis accounting for bonuses will be made available in the WFA website.

2 Production Profitability (costs of production are the same) 4% 8% 4% 8% 11% 8% 77% 80%

3 Production Profitability (assuming costs of production are increased by 3%) 4% 8% 5% 4% 7% 11% 77% 84%

4 Warm Inland Production Profitability 12% 3% 0% 4% 2% 0% Breakeve n 85% 94%

5 Cool Climate Production Profitability 37% 33% 49% 47% Breakeve n 8% 6% 12% 8%

6 Barossa Production Profitability 39% 34% 50% 50% 9% 13% 3% 2% Growing costs: $1,022-1,227/t Average yield for 2006/08/10/12: 7.3 t/ha Growing costs: $1,161-1,394/t Average yield for 2006/08/10/12/14: 6.7 t/ha

7 Langhorne Creek Production Profitability 20% 7% 2% 14% 8% 15% 70% 64% Growing costs: $ /t Average yield for 2006/08/10/12: 10.0 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 9.7 t/ha

8 Mudgee Production Profitability 0% 0% 0% 0% 0% 100% 100% Growing costs: $ /t Average yield for 2006/08/10/12: 5.2 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 5.1t/ha

9 Riverland Production Profitability 14% 2% 0% 3% 2% 1% 84% 94% Growing costs: $ /t Average yield for 2006/08/10/12: 19.2 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 19.6 t/ha

10 Yarra Valley Production Profitability 16% 13% 38% 33% 61% 10% 2% 27% Growing costs: $ /t Average yield for 2006/08/10/12: 6.5 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 6.3 t/ha

11 Coonawarra Production Profitability 24% 48% 34% 40% Breakeve n 5% 13% 25% 11% Growing costs: $ /t Average yield for 2006/08/10/12: 6.8 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 6.2 t/ha

12 Hunter Valley Production Profitability 3% 0% 0% 3% 1% 1% 97% 95% Growing costs: $ /t Average yield for 2006/08/10/12: 5.1 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 5.2 t/ha

13 Margaret River Production Profitability 43% 38% 30% 46% 14% 5% 9% 15% Growing costs: $ /t Average yield for 2006/08/10/12: 6.6 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 6.7 t/ha

14 Mclaren Vale Production Profitability 27% 28% 49% 11% 57% 8% 13% 7% Growing costs: $ /t Average yield for 2006/08/10/12: 8.1 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 7.4 t/ha

15 Mornington Peninsula Production Profitability 8% 5% 5% 0% 5% 6% 81% 90% Growing costs: $ /t Average yield for 2006/08/10/12: 5.3 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 5.1 t/ha

16 Murray Darling- Swan Hill Production Profitability 6% 1% 7% 3% 1% 15% 78% 89% Growing costs: $ /t Average yield for 2006/08/10/12: 18.5 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 19.4 t/ha

17 Riverina Production Profitability 1% 1% 0% 1% 1% 0% 98% 98% Growing costs: $ /t Average yield for 2006/08/10/12: 13.9 t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 14.2 t/ha

18 Tasmania Production Profitability 0% 0% 0% 100% 100% Growing costs: $ /t Average yield for 2006/08/10/12: 6.2t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 5.8t/ha

19 Great Southern Production Profitability 19% 12% 2% 8% 18% 63% Breakeve n 0% 78% Growing costs: $ /t Average yield for 2006/08/10/12: 5.5t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 5.6t/ha

20 Swan District Production Profitability 0% 0% 0% 0% 0% Breakeve n 100% 100% Growing costs: $ /t Average yield for 2006/08/10/12: 6.7t/ha Growing costs: $ /t Average yield for 2006/08/10/12/14: 6.9t/ha

Challenger Wine Trust

Challenger Wine Trust 2007 Annual results Nick Gill Fund Manager 22 August 2007 Important notice Information contained in this publication is current as at 22 August 2007 unless otherwise specified and