Heterogeneous Benefits of Virus Screening for Grapevines in California

Abstract

The economic losses due to grapevine leafroll-associated virus 3 (GLRaV-3) are substantial and vary significantly across California grape regions. We expand a published economic model designed to estimate the losses associated with GLRaV-3 to accommodate the varied production and market conditions that prevail across these regions. This expanded model provides the basis for assessing the value of screening grapevines for GLRaV-3 across the heterogeneous production conditions that prevail in California, which may have important distributional effects in the industry with implications for producers, consumers, and other stakeholders. We estimate that the total potential value of virus screening statewide is roughly $90 million per year, or 1.6% of the estimated $5.5 billion annual value of production of the California grape industry. Nearly 80% of this accrues to regions outside the high-value North Coast winegrape region. The value of screening varies by region and grape type and according to disease management practices, with the highest value accruing to table grapes in the South Central Valley region and white wine grapes in the Central Coast region. We estimate that growers could pay between $3 and $12 per vine for virus screening at establishment, which is higher than the current market price of most vines, and still break even. If nurseries providing screened vines continue to capture only a fraction of this value through higher vine prices, the vast majority will accrue to growers and, ultimately, to consumers through lower retail prices for grapes and wine. The substantial investments in screening capacity in both the private and public sector will likely generate benefits for years to come.