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CASE STUDY 8 Fresh Grapes in California and Arizona Stephen Pavich & Sons | N 1986, THE STEPHEN PAVICH & SONS operation included 1,432 acres, of which 823 acres are in the Harquahala Valley, Maricopa County, Arizona, west of Phoenix; 467 acres are in the Delano, California, area; and another 142 acres are in Kern County, California, near Bakersfield (Table 11. GENERAL DATA Grapes are by far the most important crop grown by the Paviches, ac- counting for 95.7 percent of their gross sales revenue in 1985. That year, they harvested 1,105 acres of grapes. By 1986, this acreage had increased to 1,125 acres; the purchase of another 160 acres in 1987 brought their total acreage to 1,285 acres of fresh grapes. On their land in Arizona (134 acres in 1985 and 307 acres in 1936), the Paviches also grow other crops (Table 2~. c~ Climate Kern County lies at the south end of the San Joaquin Valley of California, with most of the farmland just above 500 feet in elevation. This area is naturally a desert, and irrigation is necessary to make crop production of most crops feasible. Mean annual precipitation in Bakersfield is 5.7 inches, with 89 percent falling between November and April (Table 3~. The heaviest average monthly rainfall, about 1.03 inches, occurs in February. This area typically is very hot in the summer; maximum temperatures exceed 90F an average of 110 days per year, and minimum temperatures fall below 32F only 11 days per year. A similar climate is found in Tulare County, which is located near the center of the San Joaquin Valley. The Pavich grape operation in Tulare 350

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STEPHEN PAVICH & SONS TABLE 1 Summary of Enterprise Data for the Stephen Pavich & Sons Farm Category 351 Description Farm size 1,432 acres of cropland in 1986 Labor and Stephen Pavich, Sr., works on production and marketing; Tom management Pavich and wife, Tanya, manage marketing; Steve Pavich, Jr., practices manages field operations. Pest scouting is done by hired entomologists on contract, plus the brothers. Twenty-five Marketing strategies Insect and nematode control practices Disease control practices Soil fertility management Irrigation practices Crop and livestock yields permanent hired workers do pruning, vine dressing, and other specialized duties. Approximately 350 seasonal workers are hired for harvest. The farm is a major marketing operation selling to 19 of the 20 top retail chains in the United States plus several foreign countries. Cold storage of a part of the crop brings seasonally high prices. No premium price is asked as a result of alternative farming methods except for about 3 percent of the crop, which is certified and labeled as organic and sold through health food stores. Weed control The Paviches use no-tillage methods with a perennial rye grass practices and native weed cover crop, chopped periodically. Hand weeding between grape vines is also used. No herbicides are applied. A natural parasite (the Anagrus wasp) is important for leafhopper control but is not deliberately released. Nematodes are controlled by fumigation and a 2- to 3-year fallow period. The Paviches use IPM scouting for insect pests and occasional insecticide spot spraying. Sulfur dust is applied to prevent fungal diseases, and soils are fumigated with methyl bromide before planting to suppress pathogens and nematodes. Grapes in storage are fumigated with sulfur dioxide gas. About 2.75 tons of composted steer manure per acre provide about 94 pounds N. 85 pounds P2O5, and 138 pounds K2O per acre. Grape vineyards are irrigated by flooding or using a modified drip (fanjet) system. The grapes require 3 to 6 acre-feet of water, depending on vineyard location, weather, winter precipitation, and the intensity of the crop. Water for irrigation comes from wells or rivers. Grape yields per acre (653 boxes) exceed University of California estimated normal yields for conventional production (522 boxes); culls are 1 percent versus 15 to 30 percent for conventional production. (Data may not be exactly comparable.) Financial performance Producing about 1 percent of the U.S. table grape output, the Paviches are earning a substantial net income. Their preharvest cost per box of grapes ($2.12) is virtually identical to the conventional norm. The Paviches incur somewhat higher costs for some items (for example, soil fertility) and less for others (chemicals). Profits are enhanced by higher-than-average yields, extensive storage, and a nationwide marketing system.

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352 TABLE 2 Land Use by Stephen Pavich & Sons, 1985 and 1986 ALTERNATIVE AGRICULTURE Acres Land Use 1985 1986 Grapes Bakersfield area, California Thompson Seedless 142 142 Delano area, California Almeria 0 3 Calmeria 22 46 Emperor 156 219 Red Flame Seedless 20 20 Ribier 20 10 Thompson Seedless 229 169 Subtotal, California grapes 589 609 Harquahala Valley, Arizona Exotic 12 12 Perlette 160 160 Red Flame Seedless 160 160 Thompson Seedless 184 184 Subtotal, Arizona grapes 516 516 Total grapes 1,105 1,125 Other crops Arwona Chili peppers 0 16 Cotton, pima 0 45 Cotton, short staple 0 105 Mixed melons 94 94 Squash 0 32 Watermelons 40 15 Subtotal, other crops 134 307 Total, all crops 1,239 1,432 Fallow, roads, buildings Arizona 310 137 California 193 257 Total, all land 1,742 1,826 County is at an elevation of about 560 feet. At Porterville (15 miles north of the Pavich grape operation), the normal precipitation is 11.2 inches per year, occurring almost entirely from November to April (Table 4~. The max- imum temperature exceeds 90F on an average of 112 days per year; the minimum falls below 32F on 26 days per year. The climate in the Harquahala Valley of Arizona is also hot and dry. At Phoenix (about 70 miles east of the Pavich ranch), the normal precipitation is 7 inches per year (Table 5~. The precipitation is more evenly distributed here than in California, however, with the maximum rainfall (1.22 inches) occurring in August. The elevation of the Pavich farm is about the same as

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356 ALTERNATIVE AGRICULTURE that of Phoenix 1,100 feet. Daily maximum temperatures exceed 90F an average of 165 days per year, and freezing temperatures occur an average of 12 days per year. Average relative humidity in June at Phoenix is 12 percent, compared with 23 percent in Bakersfield. PHYSICAL AND CAPITAL RESOURCES Soil The Pavich operation in the Delano area includes vineyards at both Rich- grove and McFarland. The Richgrove vineyards have Exeter and Ducor loam soils, underlain with a hardpan at 3 feet, and they require heavy ripping before a vineyard can be established. The McFarland area vineyards have much deeper soils of alluvial silt (Hanford loam) with no hardpan. Soils in the Kern County vineyard are alluvial fan soils formed by the Kern River. The soils in the Arizona vineyard are deep loess soils with no hardpan but with an occasional rock outcropping. Irrigation Systems All of the Pavich grapes are grown using irrigation. Irrigation water for the California vineyards is obtained from surface water; the Paviches' Ari- zona vineyards are irrigated from wells. The amount of irrigation water applied per acre varies widely from 3 to 5 acre-feet in California and from 4 to 6 acre-feet in Arizona. According to Steve Pavich, factors that tend to increase the irrigation water requirements for Arizona include lower-than-normal winter precipitation, higher-than- normal summer temperatures, and extraordinarily heavy crops. For the Tulare County vineyards, irrigation water costs $65.00 per acre-foot, com- pared with $3.00 per acre-foot in Kern County. The 20-fold difference be- tween the two counties in the price of water can be attributed to the age of their respective water districts. The construction of canals, dams, and other facilities was more heavily subsidized by the federal government in older water districts, such as that serving the Bakersfield area, as compared with more recently constructed districts, which include the district serving the Delano area. Given the average yield of grapes per acre in the Paviches' Tulare County vineyards (653 boxes per acre in 1935), this difference in water prices adds about $0.10 per 23-pound box to the cost of producing grapes, or $0.04 cents per pound of grapes. In Arizona the Paviches irrigate their fields from four irrigation wells: one is powered by electricity (200 horsepower, 440 volts), and three are powered by 450-horsepower natural gas engines with gearhead motors. The approx- imate cost of this irrigation water is $75.00 per acre-foot. AD but 190 acres of the Paviches' California vineyards are irrigated by grav*y-flood irrigation. Of those 190 acres, the Paviches use a conventional

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STEPHEN PAVICH & SONS 357 drip irrigation system on 80 acres (1 gallon per hour per orifice); on the other 110 acres (one vineyard), the Paviches use a fanjet system, which is a modified drip irrigation system featuring a computer that controls the flow of water to a series of hoses feeding fanjets. The Paviches report that the fanjets distribute water uniformly throughout the vineyard at a rate of up to 11 gallons per hour per orifice, with 622 orifices per acre. Liquid fertilizer or other substances can be injected into the irrigation water at rates ranging from 6 ounces per hour to 450 gallons per hour. The Paviches consider this high maximum rate an important safety factor, reducing the risk of "getting behind" in irrigating and thus suffering damage to crops. Several advantages of the fanjet system, in comparison with flood irriga- tion, are cited by the Paviches: (1) fanjets produce little or no compaction of the soil; (2) they saturate the soil for a shorter time, which allows a periodic drying of the soil and reduces the incidence of root rot; (3) they provide uniform coverage of the entire vineyard; and (4) they are highly cost-effective. The Paviches plan to expand the fanjet system to another 330 acres in the near future. Buildings and Facilities The Paviches have cold storage capacity for approximately 200,000 boxes of grapes (half of this capacity is in Arizona and the other half is in Califor- nia). They also have housing for 300 persons in Arizona and 100 persons in California. Miscellaneous sheds and warehouses are also available for the storage of equipment and materials. Machinery The Paviches have an extensive inventory of machinery and equipment, including 11 wheel-type tractors, 9 half-ton pickups, 1 three-quarter-ton pickup, 5 one-quarter-ton pickups, 7 2-ton trucks, 4 electric forklifts, 4 fertilizer spreader trucks, and miscellaneous implements (plows, disks, grasscutters, a ripper, etc.~. Virtually all of the equipment is duplicated in the California and Arizona operations. ~ , ~ , . . . MANAGEMENT FEATURES Soil Fertility From 1966 until 1970 the Paviches applied commercial fertilizer to their vineyards. They used 16-16-16 nitrogen, phosphorus, and potassium (NPK) fertilizer or 15-5-25 NPK. Since 1971, however, they have not applied any commercial fertilizer to their vineyards because they decided to switch to an alternative fertilization method, relying on legumes (untiT recently) and compost as their principal sources of nutrients. Their premise is that healthy grape plants are achieved through a proper balance of nutrients in the soil,

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358 ALTERNATIVE AGRICULTURE TABLE 6 Nutrient Content of Four Batches of Compost Used in Pavich California Vineyards Percentage Nutrient Composition Median Pounds/AcreC Nutrient 6126185a 7129185a 8114185a 11111186b (percent) (percent) Nitrogen 1.7 1.7 1.7 2.2 1.7 94 Phosphate 1.4 1.6 1.5 1.6 1.55 85 Potash 3.7 2.5 2.4 2.5 2.5 138 Calcium 3.0 2.4 2.4 4.3 2.7 148 Magnesium 1.0 1.3 1.2 1.4 1.25 69 Sodium 0.7 NA NA 0.3 NA Organic matter 32.9 30.4 32.5 NA 32.5 Water 16.0 34.4 27.8 NA 27.8 NOTE: NA indicates data were not available. A dash indicates a negligible percentage. aDellavalle Laboratory, Inc., Fresno, California. LA&L Western Laboratories, Modesto, California. Based on median analysis and assuming 2.75 tons of compost applied per acre. inclucling various trace elements. High priority is given to providing ample calcium for plant nutrition and good water penetration. The Paviches apply about 6,000 tons (about 2,000 tons in California and 4,000 tons in Arizona) of composted steer manure per year to their entire farm. This translates to about 2.5 to 3.0 tons per acre of grapes and provides approximately 94 pounds of nitrogen, 85 pounds of phosphorus (P2O5), and 138 pounds of potassium (K2O) per acre. (These figures are based on the medians of laboratory test results; see Table 6.) The rate of nitrogen appli- cation used by the Paviches is somewhat higher than the recommended rate. The compost is spread by small trucks driven between the rows of vines. The Paviches purchase more than 2,000 tons per year of ready-made compost from a local firm in California. The compost is produced from cow manure, cotton gin trash, and an inoculant. The inoculant contains bacteria and fungi selected to be resistant to high temperatures, an addition that greatly expedites the completion of the composting process (about 45 days). Laboratory tests of four batches of compost are summarized in Table 6. Price quotations (not including hauling costs) were provided by the produc- ers (Table 7~. TABLE 7 Price of Compost for Pavich California Vineyards Tonnage of Compost Dollars/Ton <500 500-1,999 2 2,000 8.00 6.00 5.00

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STEPHEN PAVICH & SONS 359 In Harquahala Valley, Arizona, this composting service is not available, so the Paviches purchase about 4,000 tons of bovine manure ($1.00 per ton plus $9.00 hauling cost) and compost it themselves, with improvised equip- ment. Their comporting process takes about 90 days to complete. For trace elements, the Paviches rely on a special preparation, an enzyme- digested mixture of fish waste materials from a cannery, plus kelp, which has an analysis of 5-1-1 NPK along with calcium and micronutrients. The fish material is applied as a foliar spray at least once each year, with extra applications when the vines are stressed by pests. In previous years the Paviches grew a legume (fava beans) as a green manure crop between the rows of the vineyards to produce nitrogen (Mad- den et al., 1986~. This practice has been terminated, however, because excessive nitrogen can be detrimental. Luxury consumption of nitrate can lead to the overproduction of foliage and shading of the grape berries, thereby reducing their market quality. In addition, producing such a thick foliar mass may cause pest problems to become more severe. The Paviches view the nutrient balance in plant tissue as an essential factor in determin- ing the populations of certain pests. For example, Steve Pavich, Ir., has observed that a very high nitrate content relative to calcium in plant tissue encourages spider mite populations and various diseases. It may also cause softer fruit, thereby reducing shelf life (Albrecht, 1975~. Further research is needed to test these relationships. Over the years, Steve Pavich, Ir., has had literally hundreds of tests done to determine the nutrient needs of his vineyards, including both soil tests and plant tissue (petiole and leaf) samples. He estimates that he has spent approximately $20,000 for these tests, which he fincis accurate but limited in value. He offered the example of one tissue analysis that showed a nitrogen concentration of 200 parts per million (ppm) compared with a standard of 800 to 1,200 ppm, clearly indicating that fertilizer was necessary. Yet, 1 week later following the irrigation of the vineyard, a second tissue analysis showed the nitrogen concentration to be 1,600 ppm. No fertilizer had been added to the vineyard between these two tests. His conclusion was that the results of the laboratory tests must be interpreted very carefully and in the context of other evidence such as the appearance of the vine's foliage and the levels of nutrients already applied. Planting and Tillage Grapes are a perennial crop, and it is theoretically possible for them to remain in production for many years. In a commercial fresh grape opera- tion, however, it is important that the grape vines in a vineyard be uni- formly productive, providing a high yield of quality grapes of uniform size, in large bunches, and with minimal pest damage. Most fresh grape grow- ers, including the Paviches, find it necessary to periodically replace the

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360 ALTERNATIVE AGRICULTURE vines in some of their vineyards because of low productivity or lack of uniform fruit quality. The process of removing and reestablishing a vineyard is expensive, typi- cally exceeding $6,700 per acre (KTonsky, 1986~. First, the vines are removed with heavy equipment, usually a backhoe or bulldozer, and taken out of the vineyard. The soil is then ripped deeply in both directions (north and south followed by east and west). The land is left fallow for 2 to 3 years; no weeds or crops are permitted to grow on the field during this time. Populations of nematodes and other pests are reduced by a combination of chemical fu- migation and solar heating of the soil. The bare field is then fumigated with chioropicrin and methyl bromide and ripped one more time in one direc- tion. Following this treatment, grape vines are transplanted into the vine- yard. Whereas the University of California grape enterprise budget recom- mends planting 454 vines (roofings) per acre, using a spacing of S-by-12 feet (Klonsky, 1986), the Paviches plant 519 vines per acre, using a spacing of 7-by-12 feet. Weecl Control Until recently the Paviches used a French plow for weed control. This device is articulated so that it operates between the vines to scrape the top layer of soil away and return loose soil onto the berm beneath the row of grape vines. However, Tom Pavich's calculations proved French plowing to be quite costly, and the Paviches now use a nonchemical, no-tilIage proce- dure for weed control in their vineyards, using labor in place of conventional herbicides (Flaherty et al., 1981~. This method is much less expensive than the French plow. After the vines are established in the vineyards the Paviches plant a permanent cover of perennial rye grass (Lolium perenne). A berm or mound of soil is shaped around the rows of vines; a bare berm is shaped in the center between the rows of vines. In this way, the irrigation water is forced to flow closer to the vines. A specially adapted grass chopper (with the center flails set shorter in the middle to rise above the central berm) is used periodically to chop the grass and native weeds of the permanent ground cover. The Paviches also observe that the ground cover supports popula- tions of various beneficial predators and parasites that feed on pests in the vineyards. In addition to flail-chopping the ground cover, the Paviches hire workers to hoe or puB weeds from among the vines. Insect Control Steve Pavich, Ir., reports that the primary insect pest in their vineyards is the grape leafhopper (Erythroneura eZegantula). In addition to monitoring the various vineyards himself, Steve Pavich hires entomologists on contract to weekly monitor insect populations and the various conditions that indicate trends in their numbers.

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STEPHEN PAVICH & SONS TABLE 9 Herbicide Costs per Acre for Conventional Production of Mature Thompson Seedless Grapes, California, 1986 363 Amount/ Cost/Acre Application Date Problem Material Vineyard Acre (dollars) Cost (dollars) January-March Weeds, Diuron 0.5 pounds 1.65 8.00 preemergence, Simazine 0.5 pounds 1.65 and clean-up Paraquat 1.0 pint 6.00 Surfactant 0.2 gallons 2.81 May-lune Maintenance Glyphosate 1.0 pint 10.00 6.00 Surfactant 0.2 gallons 2.81 Subtotal 24.92 14.00 Total costs 38.92 SOURCE: Klonsky, K. 1986. Thompson Seedless Grapes for Table UseSample Costs to Establish a Vineyard; Sample Costs for a Mature Vineyard. Davis, Calif.: University of California Cooperative Extension. and other management considerations. These budget items are designed to be typical of good management practices. The Paviches use an electrostatic sprayer (which emits electrically charged droplets that adhere to the grape plants) when they apply foliar spray or the occasional application of insecticide. This machine was redesigned at their request in a local machine shop with an improved agitator and heavy- duty pumps. The Paviches' Arizona grape operation is isolated from other (conven- tional) grape producers, but the California vineyards are literally sur- rounded by conventional grape-growing operations. Steve Pavich, Ir., ob- served that his neighboring California vineyards are heavily infested with spider mites. In spite of the risks of infestation from neighboring vineyards, however, the Paviches have found it necessary to spray only once in 15 years, on only 40 acres, to control the spider mites. Steve Pavich, Ir., be- lieves that this is a result of their improved cultural practices, including (1) expert vine dressing, (2) maintaining proper soil nutrient balances, (3) main- taining a permanent ground cover to support beneficial insect populations, and (4) obtaining the advice of qualified field entomologists. Through the advice of these experts, the Paviches avoid unnecessary applications of insecticides that would reduce the populations of natural predators and parasites, especially the beneficial western vineyard mite (Metaseulis occidentalis), which is a predator of the spider mite (Tetranychus pacificus and Eotetrancychus willametti), and the beneficial Anagrus, which is a parasite of the grape leafhopper (Erythroneura elegantula) (Dibble, 19821. The fact that the Pavich vineyards have a greatly reduced load of nonspecific pesticides probably accounts for much of their success in avoiding second- ary infestations, such as spider mites. Steve Pavich, Ir., also attributes the natural control of spider mites to the nutrient balance in the soil. He has observed that a deficiency of calcium in

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STEPHEN PAVICH & SONS 365 relation to nitrate in the plant tissue is often accompanied by a rapid growth in the population of spider mites. This relationship has not been scientifi- caDy established, but it is worthy of additional research. In the fan of 1985 the Paviches began renting a 142-acre vineyard of Thompson seedless grapes in Kern County near Bakersfield. Prior to their rental of this vineyard, very few agricultural chemicals had been applied there, although a limited amount of herbicide had been used. The Paviches improved the pruning and other cultural practices in the vineyard. They found that adequate nitrogen was already available. Water penetration in the soil was very limited, however, as a result of poor drainage. Limestone (2 tons per acre) was applied to provide calcium and to improve soil drain- age. The 1985 crop yielded 825 boxes per acre, an abnormally high yield that occurred in a year when the entire San loaquin Valley had record high yields. This vineyard was sprayed once (with methomyI) in 1985 to control leafhopper. During 1986 no sprays were applied. During a tour of the Tulare County vineyards, a 40-acre vineyard of Emperor grapes was observed. The extension entomologist who was accom- panying the site visit recalled that during 1985 this vineyard had been heavily infested with leafhopper. But in 1986 he noted that the population of grape leafhoppers near harvest time was below the levels that would cause economic damage. Many of the grape leafhopper eggs found under the grape leaves were seen to be parasitized by the Anagrus wasp. Steve Pavich, Ir., estimated that the yield in this vineyard would be 750 to 800 boxes per acre. No insecticide was applied to this vineyard in 1986. Disease ant] Nematode Control Many diseases afflict fresh grape production in the area of California in which the Pavich vineyards are located. The Paviches apply sulfur several times a year for disease control. Nematode infestations are a major threat to the longevity of grape vines. In addition to causing parasitic damage to the root system, nematodes are also a vector for grape fanTeaf virus (Xiphanema). Although he is aware that scientific evidence does not support his belief, Steve Pavich, Jr., strongly suspects that the application of compost may suppress root knot nematode (Meloidogyne spp.) and other soil-borne pests and pathogens in vineyards (Kerry, 1981; Van Gundy, 19851. The Paviches also use the more conven- tional method of controlling nematodes and other soil-borne pests: fumi- gating the soil prior to planting the grapes (with chioropicrin and methyl bromide) and maintaining the soil in a bare fallow condition for a period of 2 to 3 years between vineyard removal and reestablishment. Grapes held in storage for a matter of weeks or months are fumigated with sulfur dioxide gas, which is standard practice in the industry. Labor The management and operation of the Stephen Pavich & Sons farm requires an extensive labor force. Stephen Pavich, Sr., who is semiretired,

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366 ALTERNATIVE AGRICULTURE works on all phases of the production and marketing operations; Tom Pavich (who holds an M.B.A. degree) and his wife, Tonya (B.A., communi- cations), are in charge of marketing operations; and Steve Pavich, Ir. (B.S, viticulture), is primarily responsible for the management of field opera- tions. The labor force includes 25 regular hired workers. The Paviches empha- size the importance of a permanent labor force, particularly in the case of the highly skilled vine dressers. If the vines are not pruned properly, the results can be disastrous for the vineyards. Approximately 350 seasonal workers are also hired, primarily for the harvest period. The University of California grape enterprise budget (K. Klonsky, Univer- sity of California extension farm management specialist, interview, 1986) indicated that field laborers were being paid $4.85 per hour, including payroll taxes and fringe benefits. The Paviches pay $5.00 per hour as a base wage, plus fringe benefits and incentives, bringing the average employee wage to $6.00 and above per hour. They report that wages are higher in the Delano area than in other areas of the state such as Fresno County. Tom Pavich estimated that the higher labor costs add approximately $1.00 to the cost of producing each box of grapes. A compensating factor, however, is the very high yields and excellent quality obtained in this area. PERFORMANCE INDICATORS Environmental Impact In view of the fact that the Paviches use very little if any insecticide, no herbicide, and only sulfur as a fungicide, their grape operation poses a greatly reduced environmental threat with regard to residues of agricultural chemicals in groundwater or on food, pesticide drift onto neighboring farms, or injury to workers on the farm. Like conventional grape producers, the Paviches fumigate their cold-stor- age grapes with sulfur dioxide and their soil with the highly toxic combi- nation of chIoropicrin and methyl bromide. This soil fumigant is applied roughly 2 to 3 years prior to the first harvest of grapes and poses no toxic residue threat to consumers of the grapes. Sulfite residues on the grapes resulting from their prolonged exposure to sulfur dioxide may cause health problems for some allergy-prone consumers. However, Steve Pavich noted that these grapes are labeled with an appropriate warning (correspondence, 19871. Economic Performance Pavich grapes are sold throughout the United States and in several foreign countries: Canada, Guatemala, Hong Kong, Indonesia, Japan, Mexico, New Zealand, Panama, Saudi Arabia, Taiwan, and the United Kingdom. Their

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STEPHEN PAVICH & SONS 367 U.S. buyers include 19 of the top 20 retail food chains, plus several smaller regional outlets and a few wholesalers. Health food stores purchase 3 percent of the Pavich grapes, under the brand name "Pavich." AD of the grapes sold to health food stores come from acreage on which no pesticides have been applied for at least 2 years. The Paviches charge these specialized outlets a 12 to 25 percent premium of about $1.00 to $2.00 per 23-pound box for grapes certified as produced with practices that comply with the state's law governing organic foods. Steve Pavich, Ir., reports that the higher price is necessary to cover the additional costs of certification and special handing and storage. The vast majority of the grapes produced by the Paviches would qualify as organic according to the existing legislation in California; and, in fact, all of the Paviches' Cali- fornia and Arizona vineyards are in the process of being certified as organic, pending at least a 2-year period in which forbidden chemicals are not used. Tom Pavich reported in a 1986 interview that his family's 1935 production of fresh grapes was 704,360 boxes (23 pounds per box) or 8,100 tons. This was about 1 percent of the total U.S. production of fresh grapes.5 Tom also said that the Paviches produced 26.4 percent of the fresh grapes grown in Arizona, including 61.9 percent of the Flame seedless grapes. (This infor- mation was corroborated by M. Shine of the U.S. Department of Agriculture Market News Service in Phoenix.) The total cash value of the Pavich grapes in 1985 was $5.7 million or 1.7 percent of the total U.S. fresh grape sales.6 In 1986 the Paviches produced a substantially higher sales volume than in 1985, the result of increased production and higher prices for fresh grapes. Their production exceeded 800,000 boxes, which was due to higher yields compared with 1935 plus 20 additional acres in production. With an addi- tional 160 acres purchased and new leases in 1987, the Paviches expected to exceed 1 million boxes. Grape production involves substantial outlays of capital. Table 11 lists the expenses incurred in establishing an acre of Thompson seedless fresh grapes, according to the University of California (UC) farm management extension enterprise budget (Klonsky, 1986~. The Paviches use similar pro- cedures for establishing a vineyard, with a few exceptions, and incur some- what higher capital costs. In the first 2 years after the vines are planted, no =~rapes are harvested; in the third year there is a light harvest (435 boxes). The accumulated cost over the 3-year establishment phase is $6,711 per acre. The Paviches plant vines using a spacing of 7-by-12 feet, as contrasted with the UC assumption of spacing of S-by-12 feet. Decreasing the size of the spacing increases the number of plants per acre from 454 to 519 (al- thou~h both of these spacings are considered standard [lOonsky, 19861~. a The Paviches also keep their land tallow tor ;5 years rather than the usual a, which both increases operating costs and delays the beginning of produc- tion 1 more year, as compared with the UC budget. This delay in replanting is intended to further reduce pathogen popula- tions (especially nematodes), thereby enhancing the longevity of the vine-

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368 ALTERNATIVE AGRICULTURE TABLE 11 Sample Costs per Acre to Establish a Conventional Thompson Seedless Table Grape Vineyard in Califortua, 1986 . Costs/Acre (dollars) 1st Year 2nd Year 3rd Year Item Cultural costs Fumigation 460 Land preparation 4 hours chisel and labor 60 4 hours disk, float, and labor 72 Rootings: 454 at 37 (20 roofings, 2nd year) 168 7 Trim and store 36 2 Machine planting (2 hours labor, 2nd year) 50 10 Stakes (treated): 454 454 End posts (treated): 11 50 Stake and set end posts 131 Wire 119 String four wires and staple 100 Attach crossarms and braces: 32 hours labor 155 Crossarms 177 Training and suckering: 24 hours labor, 2nd year; 18 hours labor, 3rd year 116 87 Prune and tie: 5 hours labor, 2nd year; 18 hours labor, 3rd year 24 87 Rabbit control 15 8 19 Irrigation: 5 hours labor each year 29 29 29 Water power and/or district tax: 60 feet pumping 1, 2, 3.5 acre-feet at $32.70 33 65 114 Cultivation and irrigation preparation 60 72 72 Fertilizer: 30/pound (30 pounds N), 2nd year; 50 pounds N. 3rd year; $5/acre for application 14 20 Pest management and disease control, includes mildew 17 27 293 Herbicides: materials and application 35 32 32 Miscellaneous labor, materials 34 29 34 Total cultural costs 1,069 1,288 1,120 Harvest costs Contract at $45/ton, pick and haul 225 Total harvest costs, custom 225 Overhead costs County taxes 39 39 39 Office end lousiness costs 30 30 30 Totaloverhead costs 69 69 69 Total cash costs 1,138 1,357 1,413 Accumulated cash costs 1,138 2,495 3,908 Depreciation Building, equipment, and irrigation 65 65 65 Interest on investment at 12.5 percent Building, equipment, and irrigation 55 55 55 Land ($3,000/acre) 375 375 375 Interest in accumulated cash cost 142 312 489 Total interest on investment 572 742 918 Total cash and fixed costs for the year 1,775 2,164 2,397

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STEPHEN PAVICH & SONS TABLE 11 (Continued) 369 Costs/Acre (dollars) Item 1st Year 2nd Year 3rd Year Credit for production at $75/ton for juice -375 Net cost for the year 1,775 2,164 2,772 Accumulated net cost 1,775 3,939 6,711 Yield (tons/acre) Pesticide Costs During Establishment 1st Year: Sodium fluoaluminate 8.0 pounds (for grape leaf skeletonizes and omnivorous leaf roller) Methyl bromide (fumigant) 2nd Year: Sodium fluoaluminate 8.0 pounds (for grape leaf skeletonizes and omniverous leaf roller) Endosulfan 2.5 pounds (for leafhopper) 3rd Year: Same as pesticide production cost for that particular variety NOTE: Totals may not be exact because of rounding. Costs are based on a 120-acre unit, vines spaced at 8-by-12 feet, and yield of 5 tons. Wages include Social Security, Workmen's Compensation, and insurance. Skilled supervisory labor, $5.70/hour; unskilled labor, $4.85/hour; tractor $6.48/hour. SOURCE: Klonsky, K. 1986. Thompson Seedless Grapes for Table UseSample Costs to Establish a Vineyard; Sample Costs for a Mature Vineyard. Davis, Calif.: University of California Cooperative Extension. Cost = $8.80 + $8.00 application cost Cost = $460 Cost = $8.80 + $8.00 application cost Cost = $10.00 + $8.00 application cost yards. The Paviches expect their vines to continue in peak production for 30 to 40 years or longer, depending on soil qual*y, compared with a typical longevity of about 20 years. Table 12 lists selected operating expenses from the UC and Pavich budgets for a mature vineyard of Thompson seedless grapes (Klonsky, 1986~. UC budgets are available for several other varieties of grapes. Although the Paviches provided detailed accounting data, the categories they use to re- port their cost data are not comparable with several items in the UC farm management extension budgets. Soil fertility costs were somewhat higher on the Pavich operation than in the UC budget, but on the other hand the Paviches incurred no expenses for herbicides. The differences are trivial, however, as a proportion of total cash costs. The Pavich preharvest cost per box ($2.20) is about the same as the UC enterprise budget cost ($2.14~. Tom Pavich reports that labor accounts for about 55 percent of their grape production costs. The UC budget contains several items that are custom hired; the Paviches do all their own work except an occasional insecticide application, which is generally done by a commercial applicator. The spe- /

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370 ALTERNATIVE AGRICULTURE TABLE 12 Comparative Per Acre Costs of Pavich McFarland Vineyard and UC Enterprise Budget: Selected Practices Used in Mature Thompson Seedless Grape Vineyard, California, 1986 Pavich Farm, McFarland Vineyard (dollars) Item University of California Enterprise Budget (dollars) Field labor wage rate, includes Social Security, Workmen's Compensation, insurance Selected preharvest cash costs Irrigation preparation and cultivation 48.72 Irrigation labor 29.10 Irrigation water 130.80 Chemical fertilizer (60 pounds N) 23.00 Alternative fertilizers (compost, foliar sprays Soil amendments Herbicide Ground cover maintenance Growth regulator (gibberellic acid) Disease and pest control materials Application of pest control material (gibberellic acid) Biological pest control adviser Pruning Training Suckering Tying Thinning Girdling Pull leaves Brush disposal Total preharvest cash costsb, excluding interest on operating capital Preharvest cash cost per boxb 4.85/hour o o 38.92 o 85.12 141.81 63.50 158.90 c c 35.00 198.85 67.90 c 10.00 1,118.30 2.14 6.00/hour c 4400 280.00 o 100.00 30.00 o 22.00 85.12 220.00 c 3.00 214.00 18.00 18.00 44.00 143.00 42.00 107.00 c 1,436.00 2.20 Vines/acre Vine spacing Percentage of culls Yield, 23-pound boxes per acre (net of culls) aFoliar spray materials cost $20.00 plus $80.00 for compost ($15/ton x 5.33 tons/acre). Totals and average costs per box may not be comparable due to differences in accounting procedures. Totals may not be exact because certain data were not available or comparable. CComparable category of data not available. Data may not be exactly comparable. SOURCES: Tom and Steve Pavich, Jr., interviews, 1986; Klonsky, K. 1986. Thompson Seedless Grapes for Table UseSample Costs to Establish a Vineyard; Sample Costs for a Mature Vineyard. Davis, Calif.: University of California Cooperative Extension. 454 8 x 12 feet 15-30 percent 522 519 7 x 12 feet 1.0 percent 653

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STEPHEN PAVICH & SONS 371 cific herbicides and other pesticides assumed in the UC budget are listed in Tables 9 and 10. In interpreting the cost data, it is important to recognize that the nature of the Pavich production system is such that it is virtually impossible to place several expense items in a single category. For example, compost is applied in part for its nutrient value as a fertilizer, but it is also intencled to have a beneficial effect on the biological balance in the soil, enhancing populations of pathogens, predators, and other antagonists that may help to control certain pests (Cook, 19861. Consequently, the Paviches view com- post not just as a fertilizer but also as a major part of their pest control strategy. Detailed accounting data from the Pavich operation have been examined, but they are not reported here because of issues of confidentiality. The income of the Pavich operation is clearly enhanced by the fact that the family has an extensive marketing and storage system that enables it to receive a higher price for its grapes than if it were seDing them through another marketing firm. By holding about one-eighth of their total grape production in cold storage for 2 months (unti! just before the Chilean grapes enter the U.S. markets in December), the Paviches are able to earn a signif- icantly higher price than growers who sell all of their grapes at harvest. Without revealing confidential information regarding the profits of the Pavich grape operation, it can be stated unequivocally that their manage- ment and marketing practices are succeeding financially, in terms of cash flow, market share (1 percent of the U.S. total crop of fresh grapes), and a favorable debt-to-asset ratio. ENDNOTES 1. The University of California enterprise budget for fresh (table) grapes calls for 60 pounds of nitrogen per year. The extension recommendation for this area ranges from 30 to 40 pounds for mature grapes in good health to 80 pounds for weak or unhealthy vines. In some locations, irrigation water pumped from a depth of 400 to 500 feet contains 15 to 20 ppm of nitrate, which provides the equivalent of 40 to 50 pounds of nitrogen with normal levels of irrigation (information provided by W. Peacock, extension viticul- ture farm adviser Tulare Countv, California, 19871. , . . . 2. Flaherty et al. (1981) describe the Anagrus wasp's predation of the . in. ~ .. grape leafhopper as follows: Egg parasite of grape leafhopper. The most important natural enemy of the grape leafhopper in commercial vineyards is a tiny, almost micro- scopic wasp called Anagrus epos (Girault). Its progeny develop within the egg of the grape leafhopper, resulting in its death. Its size is about 0.3 mm (1/100 inch). These parasitic wasps are particularly valuable because of their amaz- ing ability to locate and attack grape leafhopper eggs. Also, their short life cycle permits them to increase far more rapidly than do leafhopper

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372 ALTERNATIVE AGRICULTURE populations. Their nine to ten generations during grape growing season make them capable of parasitizing 90 to 95 percent of all leafhopper eggs deposited after July. This parasite overwinters on wild blackberries, Rubus spp., on which it parasitizes the eggs of a non-econom~c, harmless leafhopper, DiLrella spp. These overwintering wasp populations tend to be along rivers that have an overstory of trees sheltering both wild "Tapes and wild black- berries. When the blackberries leaf out in February, the lush, new foli- age apparently stimulates heavy oviposition by the Dikrella leafhoppers. The Anagrus parasites increase enormously on these eggs so that by late March and early April there is widespread dispersal of the newly pro- duced Anagrus adult females. Fortunately, their dispersal occurs at the same time that grape leafhopper females begin to lay eggs. Vineyards located within a five- to ten-mile range will usually benefit immediately from the immigrant parasites. Vineyards distant from actual refuges may not show Anagrus activity until midsummer or later. (pp. 100-103) University of California researchers D. Gonzales and T. Wilson are currently conducting experiments with the introduction of several alterna- tive strains of Anagrus wasp from Mexico and Colorado in search of an effective parasite of the variegated leafhopper. This research is supported by the University of California Agricultural Experiment Station with funds provided by the California Wine Growers Association, the California Table Grape Commission, and the Raisin Advisory Board (D. Gonzales, Division of Biological Control, University of California, Riverside, telephone inter- view, 1987~. 4. The toxicity of a pesticide is expressed by the terms oral and dermal LD50. LD50 means the minimum single dosage needed to kill 50 percent of a group of test animals, usually rats or rabbits; the lethal dosage is of the pure compound and is given in so many milligrams of pesticide per kilo- gram of the animaT's body weight. Oral LD50 is a measure of the toxicity of the pesticide when adminis- tered internally to the test animals. Dermal LD50 is a measure of toxicity when the pure compound is applied to the skin of the test animals. Generally, the oral application is more toxic than the dermal. 5. The total volume of fresh (table) grapes produced in the United States in 1985 was 781,090 tons (U.S. Department of Agriculture, 19871. 6. The total value of sales of fresh (table) grapes produced in the United States in 1985 was reported as $225 million (U.S. Department of Agriculture, 1987~. Presumably, this total is for the grapes only, excluding the cost of boxes (about $1.50 per box). When the Pavich sales volume is adjusted to exclude the cost of boxes, their sales volume is about $4.6 million, or 1.7 percent of the total U.S. sales of fresh table grapes. REFERENCES Albrecht, W. A. 1975. The Albrecht Papers, Charles Waters, ed. Kansas City, Mo.: Acres U.S.A.

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STEPHEN PAVICH & SONS 373 Cook, R. I. 1986. Interrelationships of plant health and the sustainability of agriculture, with special references to plant diseases. Amer. I. of Alternative Agriculture 1~1~:19-29. Dibble, J. E. 1982. Insect and Mite Control Program for Grapes. University of California Cooperative Extension Leaflet 21102. Berkeley, Calif.: University of California, Coopera- tive Extension. English-Loeb, G. M., D. L. Flaherty, L. T. Wilson, W. Barnett, G. M. Leavitt, and W. H. Settle. 1986. Pest management affects spider mites in vineyards. California Agriculture 40(3&4):28-30. Flaherty, D. L., F. L. Jensen, A. N. Kasimatis, H. Kido, and W. I. Molter. 1982. Grape Pest Management. Agricultural Sciences Publication No. 1405. Berkeley, Calif.: Kerry, B. R. 1981. Progress in use of biological agents for control of nematodes. Pp. 79-90 in Biological Control in Crop Production, Beltsville Symposium in Agricultural Research, No. 5, G. C. Papavizas, B. Y. Endo, D. L. Klingman, L. V. Knutson, R. D. Lumsden, and J. L. Vaugh, eds. Totowa, N.~.: Allanheld, Osmun. Klonsky, K. 1986. Thompson Seedless Grapes For Table UseSample Costs to Establish a Vineyard; Sample Costs for a Mature Vineyard. Davis, Calif.: University of California, Cooperative Extension. Madden, P., S. Dabbert, and J. Domanico. 1986. Regenerative Agriculture: Concepts and Selected Case Studies. Staff Paper No. 111. University Park, Pa.: Department of Agricul- tural Economics and Rural Sociology, The Pennsylvania State University. Ridgeway, R. L., and S. B. Vinson, eds. 1977. Biological Control by Augmentation of Natural Enemies. New York: Plenum Press. Settle, W. H., L. T. Wilson, D. L. Flaherty, and G. M. English-Loeb. 1986. The variegated leafhopper, an increasing pest of grapes. California Agriculture 40~7&8~:30-32. Shine, M. 1986. USDA Market News Service in Phoenix. Telephone interview. Teriotdale, B. L. and W. D. Gubler. 1984. Disease Control Guidelines for Grapes. Berkeley, Calif.: University of California, Division of Agricultural Sciences. U.S. Department of Agriculture. 1987. Agriculture Statistics 1987. Washington, D.C. Van Gundy, S. D. 1985. Biological control of nematodes: Status and prospects in agricultural IPM systems. Pp. 467-478 in Biological Control in Agricultural IPM Systems, Marjorie A. Hay and Donald C. Herzog, eds. New York: Academic Press.