Study measures regulatory costs for Napa vineyards

A new study has put a price tag on the cost to Napa County winegrape growers of complying with government regulations.

The study, titled “Regulatory Cost of Production in Napa County Vineyards,” was commissioned by the Napa County Farm Bureau and prepared by Cal Poly, San Luis Obispo, professors Lynn Hamilton and Michael McCullough.

They found that the cost of regulatory compliance last year for winegrape growers in the county was between 8% and 12% of production costs.

For a large grower, that equated to more than $1,700 an acre and nearly $2 million overall. For a small grower, regulatory compliance cost more than $1,100 an acre and around $226,000 overall.

Paying that much to comply with regulations “makes a big difference in profitability,” Hamilton said. “Both growers and policy makers need to understand the impact of regulatory costs on the viability of farming.”

The researchers noted that other studies have found regulatory costs for California farmers have increased at a faster rate than production costs in recent years.

For example, the cost to California lettuce growers of complying with the state’s environmental, labor and food safety regulations increased by more than 1,300% from 2006 to 2024.

The study of winegrape production in Napa County, which was released last month, did not make such a comparison over time as it is the first study to measure the financial impact of regulatory compliance on the county’s winegrape growers.

However, the researchers found that compared to other California crops, regulatory compliance was especially costly in Napa County winegrape production. They also found the cost of compliance for the county’s growers was twice that of Oregon winegrape growers.  

“Our members have said continually that regulation is driving them out of business,” Napa County Farm Bureau CEO Peter Rumble said. “Without change, we might not have viable agriculture as we know it now in Napa.”

In addition to its cultural significance, Napa County’s winegrape production plays an outsize economic role in California agriculture.

In 2024, winegrapes were among the top 10 crops by value produced in California. The high-value grapes grown in Napa County made up 35% of the state’s nearly $3 billion crop, more than any other county.

Natalie Collins, president of the California Association of Winegrape Growers, pointed out that California prides itself on adhering to strict labor and environmental standards while leaving farmers to bear the cost associated with those production practices. 

“California can lead on environmental protection and worker safety while supporting viable family farms, but achieving that balance requires policymakers who understand the real-world impact on growers and their operations,” Collins said.

According to the Cal Poly study, growers in Napa County spent the most complying with regulations pertaining to minimum wage, health insurance coverage, education and training, and worker health and safety, while also bearing the cost of regulations related to air quality, water quality, pesticides and food safety.

Earlier studies of regulatory compliance found that regulatory costs were greater for small employers than large ones. The Cal Poly study explained that the passage of federal medical coverage and food safety laws that apply only to large employers have made it so regulatory costs for large employers now exceed those of smaller employers. 

The researchers noted that the study, which analyzed the expenses of one large winegrape operation and one small operation, was conducted amid a historic downturn in global wine consumption that has devastated California’s winegrape sector.

During the past few years, winegrape growers have removed tens of thousands of acres of productive vineyards, and hundreds of thousands of tons of grapes have been left unpicked during recent harvests.

The study pointed out that the added burden of regulatory costs could push some growers past the point at which farming is no longer financially viable. 

Napa County winegrape grower Johnnie White, whose family has farmed in the county for six generations, said the rising cost of regulatory compliance could make it challenging to continue producing the region’s world-renowned winegrapes.

“The sustainability of farming is in serious question because of these regulatory costs,” White said. “If we continue down the current regulatory path, we will find grape growing and farming in Napa County will no longer be sustainable.”

In this issue...

• Big cats complicate ranchers' livelihoods
• California weighs 'truth in labeling' wine industry law
• Water guides discussion at global agriculture forum
• Dry conditions push farms to new irrigation strategies
• Study measures regulatory costs for Napa vineyards
• Researchers study ways to control flatheaded borer
• New CDFW director addresses priorities, predators
• National survey shows most farmers can't afford fertilizer
• What options are available to manage citrus thrips?
• Efficient irrigation through smart and informed irrigation purchases
• Going farm fresh: School districts look to growers as they ditch ultraprocessed foods
• Bountiful Finds: A curated collection of goods made by Farm Bureau members
• Super Snacks: Big California Flavor
• Peaches signal arrival of prime fruit season
• The Scenic Route: Pit stops at California farms and ranches
• From auction ring to dinner table: Coalition ensures no junior livestock exhibitor goes without a sale
• Why calling 811 before you dig is essential for California farmers
• Study: Maximize winter cereal yields with less water