USDA and TFWA Partner to Fund the Effort

Dr. David Hughes and Connie Everett, UTIA

​Dr.​ David Hughes (left) and graduate research assistant Connie Everett expect to release priliminary results of a Tennessee-wide grape and wine industry study in early 2016. The study was funded in part by USDA and the Tennessee Farm Winegrowers Association. Photo by R. Maxey, courtesy UTIA. Download image​.

SPRING HILL, Tenn. — As part of an effort to advance rural development in Tennessee, the University of Tennessee Institute of Agriculture Department of Agricultural and Resource Economics in collaboration with the UT Center for Profitable Agriculture (CPA) is performing an analysis of growth opportunities for the state’s grape and wine industry. 

The study is part of a new effort sponsored by USDA, as well as other private and public partners, to advance rural development associated with several of the state’s agricultural sectors. From new farming businesses, to beef processing and grape and wine production, the external funding, which amounts to more than $75,000, has the potential to help agricultural businesses and rural economies grow.

The Tennessee Farm Winegrowers Association (TFWA) is among the project sponsors. The analysis will study the history of the farm-wine industry in Tennessee, including some national perspective of the industry, and assess the current state of the state’s farm-wine industry. The work will also assess the current grape production situation in Tennessee.

David Hughes, professor of agricultural and resource economics and Greever Chair in Agribusiness Development, is leading the study along with Rob Holland of the CPA. In addition to an analysis of the historical perspectives of the industry, Dr. Hughes says the effort will include: 

1. Cost analysis (an enterprise budget) for establishing and maintaining a vineyard in Tennessee, including perspectives from key growers currently operating in the state.

2. Evaluation of existing enterprise budgets for additional grape varieties.

3. Development of a general cost analysis (a generic pre-business plan) for establishing and operating a winery in Tennessee.

4. An analysis of the demand for “Tennessee” wines by state residents (including label/claims/branding requirements for use of Tennessee grapes) with an assessment of price premiums based on consumer interest in locally and regionally grown foods.

5.  An overall assessment of industry growth potential for Tennessee grapes and Tennessee wineries based on national and state industry trends, costs and demand analysis.

TFWA President Don Collier said, "The wine and grape industry in North Carolina and Virginia has over a billion dollar impact on their state's economy. The TFWA feels this study is a critical step in making a billion dollar impact on the Tennessee economy in the rural farm areas of Tennessee where jobs and economic development are so desperately needed."

Holland expects preliminary results from the effort to be available as early as January 2016.
  Initial results of the study show that the wine industry is growing nationally with especially strong growth in Tennessee.  Preliminary budget analysis indicates that a well-managed muscadine vineyard is, over the long term, a profitable enterprise. Both Holland and Hughes expect the study’s results will help growers with critical decisions regarding establishing or expanding their vineyards and wineries. 

In addition to the grape and wine portions of the study, the overall research effort includes these
 remaining objectives:

1. Increasing opportunities for livestock harvesting and processing,

2. Developing an educational pilot workshop for beginning farm operations, and

3. Developing an online market assessment tool that extracts census data for specific geographic locations for those in farming-related businesses.

Hughes projected that the remainder of the work will be ready for dissemination by 2017.

Partnering with Tennessee Office of USDA Rural Development in the funding opportunity are the Tennessee Department of Agriculture, Farm Credit Mid America and the TFWA.

The project was proposed as part of the UT Extension Agriculture and Natural Resource Community Economic Development Strategic Business Plan and was designed to support the Governor’s Rural Challenge and 10-Year Strategic Plan for Tennessee Agriculture.

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Patricia McDaniels, UTIA Marketing and Communications, 615-835-4570,​