The grape debate: Will vineyards take over as Leelanau’s key crop?

LEELANAU COUNTY – No one is expecting the grape to replace the cherry as the peninsula's agricultural mascot or the new vineyards to devour every last acre of perfect cherry-growing land. But it hasn't escaped people's notice that the county's 14 wineries are bustling and their wine seems to be selling out every year.

It remains to be seen whether this new, more profitable paradigm will extend into traditional farms or whether the wineries themselves will remain the really dynamic agricultural operations on the peninsula.

Steve Fouch, director of MSU Cooperative Extension for Benzie County and a top cherry expert, agrees that more farmers are looking at grapes as a possible way to increase their revenues.

"You didn't hear me say 'profit' because that depends on the grower and the site. I am just telling you what growers are thinking. Whether that bears out, we don't really know," Fouch said.

Even with traditional farms growing more grapes, the reality is that large, successful wineries like Leelanau Cellars in Omena and an increasing number of new wineries have been responsible for much of the growth in grape cultivation. But they also buy grapes from local farmers who have put more acreage into vineyards.

The vintners' demand for land has helped push up prices for the prime tracts benefiting from the moderating impact of Lake Michigan, Lake Leelanau and West Bay-an important feature for grapes as well as cherries.

Those prices can be as high as $10,000 an acre. One dramatic example of this price level was the purchase of 100 acres near Northport last year by Indiana ophthalmologist Dr. Steve Grossnickle, who plans to open the Forty-Five North winery.

The number of acres devoted to vineyards in Leelanau remains well under 1,000, according to the latest report from the U.S. Department of Agriculture, compared to about 12,000 for cherries. Between 1997 and 2003, the number of farms growing grapes on the Leelanau Peninsula grew from 15 to 34, and the acreage from 200 to 325.

That growth is likely to continue. Nikki Rothwell, coordinator for the Northwest Michigan Horticultural Research Station, says she knows of six or seven cherry growers in northwest lower Michigan who are adding grapes to their crops right now.

New plantings at the horticultural research station are another sign of the increased interest in wine grapes. Primarily founded for cherry research, the station plans to expand the acreage it devotes to vineyards and test out some new grape varieties after pulling out some aging cherry trees.

"There is some exciting diversification going on," Rothwell said. "People see grapes making what they think is a little bit more money than cherries."

Most cherry acreage in Leelanau has been devoted to tart cherries over the past decade.

"The prices, on average, have probably been below the price to grow the cherries," Fouch said.

USDA figures on acreage planted in cherries show farmers' waning interest in the fruit.

The number of farms producing sweet cherries declined from 150 to 118 between 1997 and 2006, while acreage dropped from 4,050 to 3,500. Acreage for tart cherry production was higher, rising from 7,850 to 8,150 between 1997 and 2006 but helping to depress prices in the process. The number of farms cultivating tarts fell from 151 to 124.

Bruce Simpson, the owner of Good Harbor Vineyards, is a third-generation Leelanau County fruit farmer who grows sweets for the maraschino market, dark sweets for canning, and balatons and Montmorency cherries for wine.

He took the plunge into vineyards about 25 years ago. He understands the disillusionment with cherries. But he is not so sure that grapes are the answer for everyone. In many cases, vineyards pose the same risks as orchards, he said.

"If you are just growing grapes, you are throwing yourself into the same commodity market of growing cherries or apples and just selling them as raw fruit."

Still, he has taken counter-measures against the cherry slump.

"We are planting more grapes and we also buy from other people, just because the wine is selling and the cherries and apples are stagnant," Simpson said.

He has put 15 additional acres of vineyard under cultivation this spring.

That's not a solution for everyone due to the huge expense and practical difficulties of running a vineyard. As a result, he doesn't expect many other farmers to move into grape production as he did.

"It costs you about $12,000 an acre to bring an acre of grapes up to maturity. That doesn't include the cost of the land.

"Most of the farmers up here are 50-plus years old. And the land is their retirement. Are they going to want to struggle with the financing or the high labor input or are they going to say, 'Here's a guy that wants to put up condos.'" And the prime land for grapes is also the prime land for view."

Fouch does say the farmers' greater interest in grapes is a positive trend. "But where we have a problem is where farmers think about putting in wine grapes and don't have a home for those grapes. They just think they can sell them down the road. They don't necessarily pay attention to varieties." The key is to work closely with winemakers on the varieties to produce.

Meanwhile, the vintners themselves keep expanding, and their numbers keep increasing, even though they all face tough competition in a global market.

John Peppler, who brokered the sale of the land to Forty-Five North, estimates that the market for good vineyard land "is now approaching an equilibrium. There are not a lot of quality sites available."

Situated amid acres of cherry groves, Gill's Pier Winery and Vineyard is an apt symbol of Leelanau's vineyards' advance.

Cultivating just four acres of grapes, the boutique winery isn't about to shift the agricultural balance away from the county's mainstay fruits single-handedly. But it will probably put in another one to two acres under cultivation and "we are looking to purchase more local grapes in the future," said Kris Sterkenburg, one of the owners.

Black Star Farms in Suttons Bay also plans more grape cultivation.

"We are continuing to look for sites where we can assure that we will continue to have the grape production that we need," said Don Coe, managing partner of Black Star Farms in Suttons Bay. "We are very bullish on the business and encourage people to get involved in it."

The rub is that wineries make much of their money by dramatically increasing the value of their production by handling the processing, sales and marketing themselves. That's a capability many farmers still don't have.

The economics of vineyards and wineries is fundamentally different from large scale farming, Coe said. The highest rewards go to those who make their own wine and sell it on their own premises. That increases the base value of the product three or four times, he said.

"The difference is that you need at least 450 acres plus to make a living off of most fruits, whereas you can make a living off 20 acres of grapes. Grapes are a more intensive form of agriculture with higher value yields."

But Simpson of Good Harbor Vineyards adds: "You really have to be 'vertically integrated' to have any chance of making a profit." That means handling processing, sales and marketing yourself.

But those opportunities aren't just available for grapes. Cherry Republic in Glen Arbor manages that feat for more than 160 products. Its wines are sold regionally and nationally.

"We use all local cherries for our wines, and our white grapes are locally grown," said Katy Wiesen, Cherry Republic winery manager. "We have our own fermentation tanks that are stored at Bel Lago."

If connoisseurs could just pay the cherry wine the same homage they give Rieslings and Merlots, that could start putting Leelanau's cherry orchards on roughly the same footing as its new upstart vineyards. And cherry growers would certainly drink to that. BN