According to a research report released yesterday by the wine industry body Vinpro, the average South African wine grape producer earned a net farming income of R20617 per hectare last year, 37 percent higher than in 2018.
Although the average production costs, which include cash expenditure and provision for replacement, were 7percent higher than in 2018 at R51821/ha, the gross farming income increased by 14percent to R72439/ha.
Vinpro’s agricultural economist Pierre-André Rabie said: “The wine industry is cyclical and the wheel is turning; in some areas just faster than others. It is encouraging that higher prices have helped improve the profitability of the average producer and although there were really great achievers in most regions, we also saw producers across the industry who continue to experience financial pressure.”
A total of 260 wine grape producers participated in the 2019 survey, which represented close to 27percent of the total area under vines and 26percent of the country's total wine grape production.