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Economies of size in wineries and impacts of pricing and product mix decisions

Author

Listed:
  • Raymond J. Folwell

    (Professor and Agricultural Economist, Department of Agricultural Economics, College of Agriculture and Home Economics, Washington State University, Pullman, Washington)

  • Mark A. Castaldi

    (Cooperative Extension Service, Cornell University, Ithaca, New York)

Abstract

Five wineries ranging in size from 10,000 to 900,000 gallons were analyzed as to investment and operating costs and the impacts of changing product and input prices on their relative financial attractiveness. The larger wineries, while being more costly to establish, offer lower per unit operating costs and greater financial returns. The returns to smaller wineries tend to be more sensitive to wine or product prices than grape and input prices.

Suggested Citation

  • Raymond J. Folwell & Mark A. Castaldi, 1987. "Economies of size in wineries and impacts of pricing and product mix decisions," Agribusiness, John Wiley & Sons, Ltd., vol. 3(3), pages 281-292.
    • Handle: RePEc:wly:agribz:v:3:y:1987:i:3:p:281-292
    DOI: 10.1002/1520-6297(198723)3:3<281::AID-AGR2720030304>3.0.CO;2-R
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    Cited by:

    1. Kenkel, Philip L. & Holcomb, Rodney B. & Hill, Amanda, 2008. "Feasibility of a Co-operative Winery," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 26(2), pages 1-17.

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