The price of organic conversion

Consultant Monty Waldin looks at the benefits of going organic or biodynamic, and calculates the costs involved.

work horses
Bill and Gracie, the work horses of Seresin Estate, Marlborough, the largest biodynamic estate in New Zealand; Photos: Monty Waldin

Compared to its conventional counterpart, organic and biodynamic winegrowing typically characterises itself as a more labour-intensive method of producing lower grape yields for wines. The higher production costs and inevitable price premium is justified – inaccurately, argue its opponents – by enhanced soil health, biodiversity and wine quality, a safer working environment, and residue-free wines.  
Like organics, biodynamics avoids the use of both herbicides and systemic fungicides and pesticides, but also insists on the use of nine ‘preparations’ whose use engenders so-called ‘formative forces’. These shape plants like vines into archetypes capable of producing crops good for both physical body and spiritual health – ‘spiritual’ meaning one’s ability to develop a deeper connection with the land, its flora, and fauna.

Why convert?

The precise costs of switching from conventional to organics are relative and depend on climate, topography, existing management practices, vine vigour, and yield. Organic management generally makes yields more consistent but consistently lower overall: less vigour (lower pruning weights), fewer bunches, smaller berries, thicker skins, less juice, fewer bottles.

The University of Adelaide’s 2008 to 2014 study in McLaren Vale, South Australia, showed yield drops of 21% for organics and 30% for a simplified form of biodynamics compared to high-input conventional farming. High-input conventional European growers who go organic/biodynamic also typically report that yields drop 20%. France’s annual 20% excess vineyard yield allowance (plafond limité de classement) would ossify if organics was mandatory, and yields returned to the historic rendement de base (basic yield).

So why would the world’s most expensive Pinot Noir (Domaine de la Romanée-Conti), Chardonnay (Leflaive Montrachet), Malbec (Noemía in Patagonia), and dry Riesling (Dr Bürklin-Wolf’s Kirchenstück) vineyards go biodynamic if this means fewer bottles? Winery owners hiring me to ‘go biodynamic’ say they want to enhance their real estate and ensure their soils are less likely to erode or compact, while growing healthier, longer-lived vines that boost wine quality, rather than saving the planet.

Alsace is France’s biodynamic wine hotspot. As well as the home of France’s first biodynamic vineyard (Domaine Eugène Meyer, from 1969), Alsace has more Michelin stars than any other French region. Its chefs caught on to flavour and texture differences in biodynamic farm produce – meat, greens, dairy – in the mid-1980s. Wineries like Marc Kreydenweiss, Marcel Deiss, and Zind-Humbrecht followed. The owners of Weingut Dr Bürklin-Wolf in Germany’s Pfalz (where I have consulted) saw how biodynamics had made the Rieslings of Marc Kreydenweiss just across the border in France’s Alsace leaner, tighter, and more site-specific. They told me they wanted the same, even after I told them with 80 ha it would take around seven years to get there. Year eight was my final working year there, as the owners felt the goal had been reached.

Blue-chip wineries elsewhere in France still needed convincing, however, largely until the late Anne-Claude Leflaive’s comparative trials between conventional, organic, and biodynamics in the mid-1990s not only produced, in her words, “soil with more microbial life, the wines age better and our customers prefer the taste,” but enough hard data to convince others to follow suit.

The biodynamic composting programme I started for Bodega Noemía was a low-tech tool to improve soil moisture retention. This in turn reduced summer irrigation, and created deeper rooting, more profound tannins – and higher points scores.

Today, around 4.5% (316,000 ha) of the global vineyard is organic or biodynamic; 80% (281,000 ha) of the global total is European, with Spain, France, and Italy accounting for 90% of Europe’s organic vineyards – and the vineyard area is growing.

But while the benefits of organics and biodynamics may seem clear, converting comes at a cost.

Certification

One unavoidable cost of becoming officially organic or biodynamic is that independent certification by an accredited body is required. Organic certification is also a prerequisite for biodynamic certification – but not vice versa. Certification reduces the risk of sharp practice and ensures taxpayer-funded subsidies for organics in the EU are accurately distributed. No government-accredited certification exists for ‘natural wine’, however.

There is typically a one-off application fee, with subsequent renewal and inspection fees. The inspection fees depend on the property: A 100% organic estate with one site and nothing but vines takes less time and costs less to inspect and certify than one with a mix of organic and non-organic crops on non-contiguous landholdings in far-flung locations.

Site visits by certifiers can be both scheduled and unscheduled, albeit with 24-hour notice to avoid wasted journeys. Certifiers check paperwork, and can take leaf samples or swab machinery for unauthorised residues.

Certified wineries generally say annual certification takes one working day to prepare paperwork plus time to be present for the inspection. Many agree the discipline of calculating what is being sprayed, when, in what volume, and at what cost, aids budgeting and wine quality.

Certifiers can advise growers about which sprays are permitted, but not which ones to use. Unfortunately, residues from long-banned sprays like arsenic persist in soil over decades and can appear when organic wines are tested by, for example, state alcohol monopolies. This can cause expensive delays.

‘Equivalence agreements’ – where one country recognises the baseline rules for what constitutes organic practice – make the global trade in organic produce easier. Equivalence agreements exist between the European Union, Switzerland, the US, Canada, Argentina, Israel, Australia, and New Zealand.

However, variations in organic rules at the national level leave certifiers a role. California Certified Organic Farmers (CCOF), for instance, charge $120.00 to $150.00 to certify any shipment of organic wine that crosses the Atlantic to any of the EU’s 28 member states. One such equivalence check concerns compost. While unlimited organic compost can be added to Californian vines, the EU’s limit is 170 kg of nitrogen per hectare per year.

A little help from my subsidies

The EU gives farmers (and winegrowers) subsidies to go organic. Initially, subsidies saw organics as an end in itself, but are now geared towards enhancing farmland and the environment.

Subsidies for certified organic vineyards are €350.00 ($391.00) per hectare during conversion and €150.00 per hectare after conversion ends. They may look juicy, but subsidies represent less than 1% of the income of a 12-ha organic estate in Bergerac, for example. Given that France’s minimum wage (the SMIC) is €9.61 per hour, the subsidy buys just one 35-hour French week of labour per hectare during each conversion year. This might cover hand plucking potentially rot-promoting water shoots in a medium-density Bergerac vineyard (5,000 vines/ha); but it won’t cover the same task in a 10,000 vines/ha vineyard in neighbouring Bordeaux.

And organic under-vine weed control with discs and brushes can mean two tractor passes compared to a single one using herbicides. This may explain why organic vineyards in France are more likely than conventional ones both to have full-time employees (71.5% to 66.8%), and to have two or more full-time employees (37.3% to 30.9%).

This makes competing at the lower end of the price spectrum hard. The production cost of a tonneau of AOC Bordeaux from vines yielding 50 hL/ha is €1,923.00 for organic compared to €1,731.00 for its conventional counterpart.

The winemaking

Organic and biodynamic rules restrict the range and use of winemaking aids, agents, and additives.

Demeter, the biodynamic certification body, insists that egg whites for fining, grape concentrate, and sugar (chaptalisation) must be organic/biodynamic, price premiums for which vary locally.

Certified organic spirit for fortification is mandatory in the EU. Organic grape spirit comprises 20% of each bottle and attracts a 20% premium in the Douro. Maximum sulphite levels for still wines (all colours, range of styles, and sweetness levels) are on average 35% lower for Demeter biodynamic wines and 17% lower for organic wines, compared to EU standards for conventional wines.

Lower permitted sulphite levels explain why (anecdotally) the biggest increased cost in organic winemaking is more reliance on temperature control; cooling can help limit volatile acidity levels, given organics rules reduced the levels of oxygen-scavenging sulphites. And warming can also help ferments that have been slowed by insufficient yeast assimilable nitrogen (YAN) in the must, caused by a loss of nitrogen to competitive cover crops. Organics alone does not a good wine make.

But once all the work has been done, what’s the financial pay off?

Co-ops playing monopoly

Demand from German wholesalers, budget retailers like Aldi, and state monopolies like Sweden’s Systembolaget – whose 2013 target of having 10% of all sales and 20% of on-shelf wines organic by 2020 was achieved in 2014 – is driving growth in value-for-money organic-branded and own-label wines. These buyers are so big that their purchasing decisions can help drive the global market, suggesting the organic and biodynamic categories are set to grow.

For producers, going organic can be a way of getting higher premiums for their wines. France’s respected Plaimont co-op in St Mont, for example, sees organics as a means of shifting conventional growers from its entry level ‘Tradition’ tier to higher-margin ones like ‘Privilège’. It pays growers a 40% premium for organics – 25% for lower yields and 15% for higher labour costs.

Local markets also act as stimuli. Italy’s biggest organic farming zone, Biodistretto Bio Venezia, covers 1,000 ha near tourist hotspot Venice.

Local merchant-grower Daniele Piccinin – whose father Aurelio died from pesticide poisoning – pays grape growers who go organic a 20% premium to cover 15% lower yields and 15% higher costs. “They get more consistent yields, and I know I can sell the organic wine for a premium,” says Piccinin.

Monty Waldin is a consultant on biodynamic and sustainable viticulture and has written widely on the topic. His Channel 4 TV series, 'Chateau Monty', followed his journey to make a biodynamic red wine from a vineyard in France's Roussillon region.

 

The physiological changes one sees after converting to biodynamics are:

• More regular pousse (budding)
• Increased soil permeability
• More balanced leaf-to-fruit ratios; there is less need for canopy management overall but you still have to get in early to remove water shoots
• Leaf cuticles become thicker; leaves are rougher to the touch
• Shoots are more erect
• Vine roots more complex and deeper
• Less cramping in bunches (and so less risk of rot) 
• Earlier leaf senescence and ripening, so you are not picking grapes from vines whose leaves are still really green but instead are autumnal 
• Flavour ripeness and sugar ripeness coincide
• Wine free of residues from systemics

Certification bodies

The best-known accredited certifiers are Ecocert (Europe); LACON (Germany, Austria); the Institute for Market Ecology (Swiss-based, but active in Chile and Argentina); California Certified Organic Farmers (CCOF), Stellar Organic Certification, and Oregon Tilth Certified Organic (OTCO) in the USA; the Soil Association (UK); BioGro (New Zealand); and the National Association for Sustainable Agriculture, Australia (NASAA), in Australia.

Biodynamic farming rules were the sole preserve of Demeter, the world’s first farming certification body (1928). However, Demeter’s historic antipathy to alcohol –which it deemed disruptive to one’s spiritual connection to the land – encouraged two biodynamic bodies specific to winegrowing to form.

They are the Syndicat International des Vignerons en Culture Bio-Dynamique or SIVCBD (‘Biodyvin’ logo) in France (founded early 1990s), whose designated certifier is Ecocert France, and the more recent (mid-2000s) respect-BIODYN in Austria and Germany, whose designated certifier is LACON.

As Demeter France also mandates Ecocert France as its certifier, it makes life easier for those (usually French) winegrowers wishing to join both Demeter and the SIVCBD.

Application fees

Examples of one-off application fees to initiate admission to the subsequent certification process
€300.00 to €800.00 to Ecocert France for organic certification
$325.00 for California Certified Organic Farmers for organic certification
€150.00 for SIVCBD (Biodyvin) for biodynamic certification 
Demeter’s certification fees also include an initial application fee and annual renewal application fees. Its primary licensing fee (to use the Demeter logo on product) is based neither on vineyard surface area nor volume of wine production but is a percentage calculated on sales values of wine. Demeter France’s levy is 0.4% of the sales value of the certified wine. Demeter USA’s levy is 0.6% of sales value.

The biodynamic/organic vineyard toolbox

Examples of tools/spray material typically associated with organic and biodynamic winegrowing:
1) Mathias Thun’s annual ‘Sowing and Planting Calendar’ (Aussaattage, in German), which is based on principles of moon planting: €9.00
2) Annual per hectare cost of biodynamic sprays to satisfy minimum certification requirements: €18.50 based on 1 x horn manure 500 @ €8.00; 1 x horn silica 501 @ €4.20; 1 x Maria Thun’s barrel compost      @ €6.30; 1 x herb tea such as chamomile or stinging nettle @ €1.60 to €3.50 – (price based on minimum of 10 ha)
3) Stirring machine (dynamiser) needed for key biodynamic sprays like horn manure 500 (soil) and horn silica 501 (vines): 37-L capacity @ €2,420.00 + VAT (France); 110-L capacity @ €3,070.00 + VAT          (France); 250-L capacity @ €3,700 + VAT (France) – typical spray rates are 30 L to 120 L per ha
4) Tractor-mounted under-vine weeder @ roughly €8,000.00

Case Study:

Biodynamic certification by Ecocert for the Syndicat International des Vignerons en Culture Bio-Dynamique (SIVCBD), whose certification marque is ‘Biodyvin’, at Domaine Zind-Humbrecht, Alsace (40 ha)
One-time €110.00 administration fee to Ecocert France, and then:
• €850.00 Ecocert fee for it to certify that both vineyard and winery conform not only to the EU’s organic rules but also to the SIVCBD’s biodynamic rules
• €1,000.00 for SIVCBD’s surface area levy calculated @ €20.00/ha of vineyard x 40 hectares [NB: this fee is coincidentally capped at 40 ha so a 70-ha estate would also pay €1,000.00]
• €200.00 for SIVCBD’s annual membership fee

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