This study evaluates the farm-level economic implications of adopting regenerative agriculture (RA) versus conventional viticulture (CV) in Sonoma County, CA. RA practices examined include no-till, cover cropping, compost application, and sheep integration; CV here reflects a relatively sustainable conventional system meeting CSWA standards (www.californiasustainablewinegrowing.org). The goal was to determine long-term profitability, identify key drivers of economic outcomes, and test sensitivity to yield changes and price premiums over a 30-year vineyard horizon.
Project layout
Agronomic and financial data were collected via structured questionnaire and interviews with managers of four Sonoma County vineyards from four different producers. Cultivars included Cabernet Sauvignon, Pinot Noir and Chardonnay. More than 50 variables (capital expenses, operational expenses, revenues and indirect benefits) were compiled and modelled under RA and CV scenarios. Profit projections were calculated over 30 years, with sensitivity analyses for yield reductions down to 40% and price variations (±20%). The study compared outsourced versus in-house composting and sheep integration and accounted for indirect benefits (nutrients, erosion control, carbon at $20/t CO2). The time value of money was accounted for to calculate and compare normalised profit margins over a 30-year period (NPV).
Results
- Across the four sites, capital expenditure was similar for RA and CV
- Average annual operational expenses were slightly higher for RA (+$306/ha), mainly due to compost and grazing costs, partially offset by savings from eliminating tillage, mowing, and herbicides.
- When indirect benefits were included, the annualised cost gap narrowed.
- Over 30 years (outsourced RA), RA’s normalised profit averaged 2 to 8% below CV, assuming equal yields.
- In-house RA (on-site compost and sheep) delivered a positive NPV ($557/ha), whereas outsourced RA delivered a negative NPV (−$1,756/ha).
- Sensitivity analysis showed that optimistic scenarios (moderate yield declines + price premiums) yield positive NPVs for RA, whereas larger yield losses without price increases produce substantial negative outcomes.
Significance of the study
In the current South African context, we can assume that RA will be unsubsidised. Given that consumers do not necessarily expect to pay more for organic wines, we can also assume the same behaviour towards RA wines. Producers transitioning to RA must allow time to establish in-house composting and livestock grazing systems before going full swing into RA, as outsourcing these services/materials may increase operational expenses and decrease profitability.
Reference:
Axel Herrera, Ellen M. Bruno, Kerri Steenwerth, Alexandra Everson and Cristina Lazcano. 2026. “Evaluating the economic viability of regenerative viticulture in Sonoma County, California.” American Journal of Enology and Viticulture 2026 77:0770002
