From "The Australian Grapegrower & Winemaker" No. 413 May 1998

The Gibson-Schulz vineyard system

Rob Gibson Viticulturist
Gibson Wine Growing Services / Peter Lehmann Wines
Ashley Johnstone and Colin Hinze

Introduction
The systems approach dictates that a suite of interrelated practices always be considered because if one part of the viticultural equation changes there is a necessity to attend to at least one other factor to maintain control and achieve objectives.
For example if the trellis is changed, increases in effective leaf area may necessitate more available soil moisture, either from root extension or irrigation scheduling. Otherwise, complications from the onset of moisture stress being too severe and too early may occur.
This system integrates the following key considerations:
* Mechanisation
* Row orientation with soil uniformity
* Soil preparation
* Root distribution
* Midrow management
* High two-wire vertical trellis
* Alternate high and low vines (with a "window" between them)
* Crop per unit effective leaf area
* Canopy size, orientation and leaf age
* Irrigation design and scheduling

Background
For some time, split trellis systems have been used in viticulture to benefit from high vigour situations. Narrow and wide "T" trellis, Geneva Double Curtain, Two Wire Vertical, Lyre and Scott Henry are examples of such trellising, designed to reduce the effect of excess vigour by increasing the amount of cordon per hectare.
Each of these systems may result in management problems, where mechanisation is required for larger areas where unmanageable labour peaks would otherwise occur where cost of production pressure is high in sites where radiation levels are moderate to high. As a result of the quantity versus yield challenge, the Gibson-Schulz System has been developed by Marcus Schulz and Rob Gibson and been adopted by Southcorp Wines on some higher vigour blocks around Australia, as well as by local Barossa grapegrowers.
The aim has been to maintain the quality and style of fruit grown from traditional vineyards producing premium quality fruit, while increasing yield and reducing labour costs.

Application
The expense of approximately $9000/ha on trellis construction and increased vine training and cordon pruning have to be offset against premiums achieved for improved quality, slightly higher yields and reduced crop loss, with earlier maturity of both vines and grapes. The system is quite appropriate for premium red wine districts where soils have moderate to high growth capacity. The system is also appropriate for larger scale plantings where effective mechanised operation is necessary.
It is not appropriate for low capacity sites, particularly those with shallow and light structured soils. It has not been assessed as a redevelopment option in already established vineyards.

Barossa Valley case study - Schulz Enterprises, Kalimna
At Penfolds (now Southcorp Wines) in the early 1990s, premium prices for individual plantings of Shiraz were well established. This identified the "opportunity cost" of producing quality below the Kalimna sub-district potential. So, rather than reduce yields from 7 tonne/ha (less than 3t/acre) to even less economic levels, it was decided to invest in a new evolving management system that would give at least average Kalimna prices and higher yields [ 10 t/ha (4t/acre)] by increasing effective leaf area and applying deficit irrigation practices.
The desired quality has subsequently been achieved since year 6 after planting (fourth crop) for this "own root" Shiraz planting. The mechanisation is now fully tested and operating costs, which were initially 40% above average, are now approaching the efficiencies expected of conventional systems. The quality of grapes from these young vines is advanced and exceptionally good.
In summary the aims were to:
. Increase Shiraz quality and price achieved.
. Increase overall returns on an area basis.
. Maintain or reduce cost of production.

Rob Gibson

From "SUNLIGHT INTO WINE - A HANDBOOK FOR WINEGRAPE MANAGEMENT" by Richard Smart and Michael Robinson

Vineyard Assessment of Potential Wine Quality

Penfolds Wines is one of Australia's largest wineries, and uses fruit from a large number of vineyards in different regions to produce a wide range of wine styles and qualities. This range includes the famous 'Grange Hermitage' label, widely regarded as one of Australia's finest dry red table wines. We began vineyard assessment in 1982 with the principal aim of defining the quality potential of each of our vineyards, to facilitate subsequent winery operations. Of particular concern was to identify vineyard sources of Grange Hermitage, so that this supply could be secured against the prospect of growers removing some vineyards. Determining quality potential of the vineyards before vintage allowed us to batch grapes in parcels of uniform quality during the intake and crushing processes.
Two field visits were timed at approximately 50% veraison and 10 days prior to the estimated harvest date. We had slightly modified for our own use the original score sheet developed by Richard Smart. Observations were made according to two vineyard scoresheets. These subjective observations were made on at least six vines, and were recorded as averages.

The scorecard used at veraison records leaf condition, presence of growing tips, presence of laterals, average shoot length, periderm development, fruit and canopy shading, and vine size and balance. Two weeks before harvest we assessed growing tip presence, leaf condition and fruit exposure, and also assessed fruit colour, size, flavour and skin thickness. Chemical analyses were made of sugar, acidity, pH, and K along with berry weight.

Scoring of each parameter varied according to the variety. No general scoresheet had been found effective across all varieties and styles of wines. The score system had been found to give a useful prediction of wine quality; however this aspect is the subject of ongoing development. The quality evaluation was done by a system of batch tracing from vineyard to wine end use and winemakers classification to an extensive range of end product quality grades. Vineyard scoring also helped to explain real differences in quality in terms relevant to vineyard management. These differences could not previously be explained by the simple variety, district and site parameters previously used by winemakers. After seven years experience we found that the relationship of score to wine quality had been improved by separating some varieties and then devising different scorecards for each.

Vineyard assessment was a useful tool for selection and isolation of premium grape batches for appropriate styles, standardising observation procedures for semi-skilled staff, and focusing on vineyard management practices (e.g. irrigation) to affect relevant parameters (e.g. leaf condition and growing tip presence). Further, it has stimulated the collection of information on vineyard practices and site conditions in premium vineyards. Future research will be conducted in a joint project with the Waite Agricultural Research Institute at the University of Adelaide. ..Rob Gibson

From The Australian Magazine August 9 - 10 1997.

"Chief whip-holder is Rob Gibson, the pipe-smoking, handlebar-moustached viticulturalist for Penfolds, who says one of the keys to getting the best out of the vines is to put them under stress. Serious stress. The aim, he says, is to intensify the flavour of the berries. So, for example, the vigorous shiraz vine would normally produce a lot of grapes. Not here, where quantity is not the issue. Pruning strictly limits the number of bunches possible. Then, just at the point where the black colour starts on the fruit, vines that are irrigated will have their water cut off. If they're not irrigated, the structure of the soil performs this depletion naturally. The suffering vine then directs all its resources into the berries, rather than the leafy bits.

All this trauma has an effect on the plant. "Essentially it gets the ripening process going earlier and it makes for smaller bunches ... and more intense, sweeter grapes, ripening slightly earlier," says Gibson. The danger in this con- trolled neglect is that the vines are hurt so badly they lose a dramatic amount of grapes. To prevent this, moisture-sensing equipment is placed in the soil to remove the guesswork. "

MANAGING VINEYARD ECONOMICS

The economics of vineyards varies widely across the country. Some are currently uneconomic and others will join them in the future. The question is, do the owners of these vineyards realise their situation and do the owners in the marginal cases realise the risks they face? Whereas the owner operator can wind down their expenses by doing more work for less return during periods of lower productivity and prices, this is less likely to occur in most investor vineyards where an "arms length" approach has to be taken by the owners. The asset value realised at the inevitable time of sale then becomes paramount. The fillip from the tax concessions can only last for about 5 years and capital gains will be difficult to achieve if the market for the grapes is soft at the time of sale.

Operating vineyards economically to generate ongoing returns on funds invested at levels superior to bank interest, is the aim and eventual achievement for most professionally managed vineyards.

There are numerous factors, which are critical to this success, and newcomers ignore them at their own peril. Assuming site and variety selection minimise risk of loss due to climatic events, other economically sensitive issues require good management. The overall economic performance of a vineyard is a composite of many components (blocks) and as such is difficult to arrive at.

The issues relating to a mature operating vineyard can be summarised logically in terms of elements which impact on:

1. Gross Income
2. Operating Expenses
3. Overheads

Gross income is sensitive to:

1. Price security
2. Quality specifications / penalties and incentives (bonuses)
3. Productivity including loss control
4. Accuracy of market projections for winegrapes combined with strategic planning and action
5. R&D applications

Expenses are broadly sensitive to:

1. Vineyard design
2. Mechanisation and labour costs
3. Cost of supplies including usage
4. Loss control and insurance policy
5. Offsite administration / legal compliance costs
6. Management costs
7. Accident/ incident costs
8. Effectiveness of tax position
9. R&D applications
10. Environmental characteristics including weather events.

Overheads are broadly sensitive to:

1. Scale and efficiency of operation
2. Risk management policy
3. Financial resources
4. Outsourcing policy
5. Interest rates

Both income and expense sides and overhead aspects are all dependant on capital availability, management skills and resources.

The separation of capital from operating expenses in vineyards must be accurate and timely so that each part of the operation can be managed effectively. In a booming market for vineyards the temptation is to allow inefficiencies excused by the rush to get the vineyard planted, whilst being unaware of industry benchmarks in performance.

Inflated capital budgets for projects are sometimes accepted in the belief that the asset valuation and return on funds target will bear it, given the "premium quality" - but for how long?
Independent commentary on performance against industry benchmarks can be arranged from suitably qualified consultants.

Some economic benchmarks now used are:

1. Net capital cost of vineyard establishment over first 4 years
2. Operating costs
3. Overheads
4. Productivity
5. Forward contract and historical prices / gross $/ha
6. Maintenance redevelopment costs
7. Depreciation capital requirements
8. Incidental costs

Fornulating income projections for vineyards based on a "hopes and dreams" approach for premium quality rewards is all to common. If there is no written specifications for quality and price grading system from the winemaker, quality premiums will be reduced in a balanced or oversupplied market.......... count on the written commitment only.

The Rate of Establishment benchmark for premium districts for yield is 3, 6, 12t/ha in years 2,3 and 4 respectively. The net capital cost for full establishment (excluding land cost) at the end of year 4 is then $A18,000/ha with peak drawings of $A28,000/ha in year 3. The income generated during establishment from 21 tonne of production at $A1,200/tonne is approximately $A25,000/ha. These benchmarks are not being met on many uneconomic projects. I have seen some projects which generate $A9,600/ha only in the four year period with only 8 tonne produced and the final result is a patchy vineyard with annual production of 5 - 6t/ha which is supposedly "high quality" albeit uneconomic. The alternative "high" performance efforts have produced 50% above benchmark in the period, resulting in peak drawings of just over $20,000/ha and a payback of less than 5 years but this taxes vine health and long-term profitability and is not sound viticulture over the benchmark 25-30 year lifespan, although very impressive in the short term.

In summary, increased awareness of industry benchmarks and monitoring of vineyards against these, will reveal a need to be more competitive in a number of aspects of vineyard economics. Unspecified hopes for quality will only add confusion. The bottom line is that contract prices are the only insurance and they will need to be above $A2,500/tonne if low yield is to be economic. I wish to acknowledge the assistance of Andrew Pike, Pikes Wines in preparation of this article.

ROB GIBSON
Principal Gibson Vineyard Services & BarossaVale Wines
Mobile 0414 511027
Fax: 08 85624490
E-mail: rob.gibson@barossavale.com