Document ID: EPA-HQ-OPP-2005-0124-0064
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-05-02T04:00Z

SEQ CHAPTER \h \r 1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON D.C., 20460

  SEQ CHAPTER \h \r 1 

OFFICE OF

PREVENTION, PESTICIDES AND TOXIC SUBSTANCES

MEMORANDUM

SUBJECT:	Assessment of the Benefits of Soil Fumigation with Methyl
Bromide, Chloropicrin, and Metam Sodium in Grape Production  (DP#337490)

FROM:	Leonard Yourman, Plant Pathologist

	Biological Analysis Branch

	T J Wyatt, Agricultural Economist	

	Economic Analysis Branch

	Biological and Economic Analysis Division (7503P)

THRU:	Arnet Jones, Chief 	

	Biological Analysis Branch

	Timothy Kiely, Chief

	Economic Analysis Branch

	Biological and Economic Analysis Division (7503P)

TO:		John Leahy, Senior Policy Advisor

	Special Review and Reregistration Division  (7508P)

Product Review Panel:  April 16, 2007

Summary

Soil fumigation prior to replanting grape vineyards provides substantial
benefits by decreasing mortality of young vines, improving growth and
establishment, and increasing yields through the lifespan of the
vineyard.  Fumigation targets a suite of soil pests, including nematodes
and disease-causing fungi.  Methyl bromide with chloropicrin and
1,3-dichloropropene with chloropicrin are commonly used in California,
while metam sodium is more commonly used in Oregon and Washington. 
Northeastern and southern grape producers use 1,3-dichloropropene alone
or do not fumigate.  The regional differences are largely driven by
variation in soil types and specific pests.

Methyl bromide, with chloropicrin, is typically used in California where
1,3-dichloropropene is limited by township caps.  It penetrates soil
better than metam sodium, resulting in improved yields worth about
$270/acre annually.  Extrapolating from the acres treated to the bearing
acres affected implies that the value of methyl bromide and chloropicrin
is about $7.2 million/year.  Where 1,3-dichloropropene is not limited,
it is used in conjunction with chloropicrin.  In comparison to metam
sodium, use of chloropicrin improves yields and increases revenues about
$80/acre each year of full production.  Thus, chloropicrin provides an
additional $13.7 million in benefits.  Compared to fumigation with
1,3-dichloropropene alone, which could control nematodes, but not soil
pathogens, fumigation with methyl bromide and chloropicrin provides
benefits totaling around $20.4 million annually.  A portion of these
benefits accrues to consumers in the form of increased supply and lower
prices.  This figure does not include the benefits associated with
improved survival of young vines, which may influence the decision to
invest in a vineyard that involves large initial costs.  

Metam sodium provides benefits to growers in Washington and Oregon, but,
compared to fumigation with 1,3-dichloropropene and chloropicrin, the
benefits are primarily in lower establishment costs of about
$25-50/acre.  BEAD does not have sufficient data on differences in
long-term yields to evaluate the total benefits of fumigation in this
region.

Background

As part of the Reregistration Eligibility Decision (RED) process, EPA is
assessing the risks and benefits of the use of several soil fumigants
(dazomet, chloropicrin, metam potassium, metam sodium, and methyl
bromide).  This document presents the assessment of the benefits
provided by the soil fumigants in the production of grapes (wine, table,
raisin, and juice).  Conceptually, the benefits of a pesticide like a
soil fumigant are the improvements in production and/or reductions in
cost resulting from the pesticide’s use.  The benefits of a pesticide
are shared between the users of the pesticide, e.g., grape producers,
and consumers of grapes and grape products.  Consumers benefit because
higher production and/or lower costs may translate into a cheaper and
more abundant supply of grapes.

This document is an assessment of the benefits of soil fumigants.  As
such, it compares the current situation in which fumigants are available
for use, subject to existing label restrictions, to the situation that
is estimated to occur were the fumigants not available.  This is
somewhat different from an assessment of the impacts of regulation, as
no specific regulatory scheme is considered.

Grapes

California is the dominant producer of grapes in the U.S.  Table 1
presents a summary of acreage, production, and value for select regions.
 Grapes are grown for multiple purposes, including fresh consumption
(table grapes), dried (raisins), wine, and juice.  Certain varieties of
grapes may be used predominantly for one purpose, but there is
considerable flexibility.  California produces about 90% of table,
raisin, and wine grapes, and over 50% of juice grapes.  Production in
the Pacific Northwest is fairly evenly divided between juice and wine,
while production in the Northeast is mostly for juice.  Most production
in southern states is for wine.

Table 1.  U.S. grape acreage, production. and value, 2001 – 2005
average.

Region	Bearing Acres	Production

(1000 tons)	Yield

(ton/acre)	Value

($1000)	Price

($/ton)

California	809,400	6,057.8	7.4	2,623,964	435

Pacific Northwest 1	61,720	351.8	5.7	169,463	485

Northeast 2	58,380	311.9	5.3	76,460	245

South 3	8,900	23.9	2.7	22,596	945

U.S.	940,260	6,752.7	7.2	2,884,764	425

Source:	Noncitrus Fruits and Nuts Summary (USDA NASS, 2002-2006b).  U.S.
totals do not equal the sum of the columns because some states are not
included in the table.

1	Oregon and Washington.

2	Michigan, New York, Ohio, and Pennsylvania.

3	Arkansas, Georgia, Missouri, North Carolina, Texas, and Virginia.

Fumigant Use

Grape vineyards require periodic replanting.  Vineyards are replanted
when the natural productive life of the vines ends or when the economic
situation changes such that customer demand for new varieties or new
crop price projections warrants replacing existing vineyards.  Soils may
be fumigated prior to planting.  Because a typical vineyard may be
productive for 10-25 years or longer, plantings may represent a small
fraction of bearing acreage, but small changes in plantings will have
large impacts on production in later years.

Data on both plantings and fumigant use are sparse outside California. 
A major difficulty of both public and private data sources is the
sporadic nature of use.  Because a grower may not replant a portion of
his or her orchard every year and the amount planted is small compared
to bearing acreage, surveys may overlook relatively important use of
soil fumigants.  The following tables present BEAD’s best estimates,
which combine a number of sources including USDA and state reports,
reports of trade associations, and EPA proprietary data.

California

Table 2 presents estimated use of methyl bromide, compared to acres
planted, in California.  Fumigation with methyl bromide is relatively
more frequent on table and raisin grape than on wine grape, and more
important on table grapes than on raisin.  As use of methyl bromide is
constrained under the Montreal Protocol, the price has increased and
methyl bromide has become less attractive for crops with lower returns. 
For example, in 2002, methyl bromide was estimated to be applied to
approximately 45% of new vineyard land or 90% of replanted vineyards
(USDA CSREES, 2002) while current use has fallen to under 5% of planted
acres.

Table 2.  Annual methyl bromide usage on California grapes, 2001-2005.

Crop	Planted Acres 1	Acres Treated 2	% Acres Treated	lb Applied	Rate 3

(lb/acre/year)

Table and Raisin Grape	3,920	250	6.4	62,000	248.8

Wine Grape	10,860	240	2.2	85,000	357.5

All Grapes	14,780	490	3.3	147,000	302.0

Source:	California Agricultural Statistics Service (2001-2006), Cal DPR
(2000-2005), and EPA proprietary data.

1	Acres planted are for calendar year following fumigation.

2	Acres treated for California may be underestimated.  Substantial
acreage is reported simply as “pre-plant fumigation” or
“uncultivated agricultural land,” some of which could be for
vineyards.

3	Effective or broadcast-equivalent rate.

Table 3 presents estimated use of chloropicrin.  Estimating the use of
chloropicrin presents significant challenges because it is almost always
used in combination with methyl bromide or 1,3-dichloropropene (1,3-D). 
In fact, methyl bromide is only used in combination with chloropicrin. 
However, California data (Cal DPR, 2000-2005) does not always reflect
this, indicating substantial underreporting of chloropicrin use.  It may
be that some pesticide use reports do not distinguish between products
and/or only report the primary fumigant used.  BEAD has attempted to
correct for this, but the estimated acres treated, around 2,000 acres
annually, could still be biased downward.  Application rates may
similarly be biased downward.

Table 3.  Annual chloropicrin usage on California grapes, 2001-2005.

Fumigant	Planted Acres 1	Acres Treated 2	% Acres Treated	lb Applied	Rate
3

(lb/acre/year)

Table and Raisin Grape	3,920	990	25.2	12,000	12.5

Wine Grape	10,860	990	9.1	32,000	32.3

All Grapes	14,780	2,000	13.4	41,000	20.9

Source:	California Agricultural Statistics Service (2001-2006), Cal DPR
(2000-2005), and EPA proprietary data.

1	Acres planted are for calendar year following fumigation.

2	Acres treated for California may be underestimated.  Substantial
acreage is reported simply as “pre-plant fumigation” or
“uncultivated agricultural land,” some of which could be for orchard
crops.  Further, methyl bromide is always mixed with chloropicrin and
1,3-D is often mixed with chloropicrin.  Cal DPR data (2000-2005),
however, often indicate fewer acres treated with chloropicrin than with
methyl bromide.

3	Effective or broadcast-equivalent rate.  Due to apparent
under-reporting of chloropicrin used in combination with other
fumigants, rates may be biased downward.

Estimates of metam sodium use are shown in Table 4.  Metam sodium is not
an important fumigant for wine grapes, but relatively more important on
table and raisin grapes.  Metam sodium may be used as a follow-up
treatment to 1,3-D.

Table 4.  Annual metam sodium usage on California grapes, 2001-2005.

Fumigant	Planted Acres 1	Acres Treated 2	% Acres Treated	lb Applied	Rate
3

(lb/acre/year)

Table and Raisin Grape	3,920	210	5.3	24,000	114.5

Wine Grape	10,860	110	1.0	19,000	167.2

All Grapes	14,780	320	2.2	43,000	132.8

Source:	Cal DPR (2000-2005), USDA NASS (2001-2006), USDA NASS
(2001-2004, 2006), USDA NASS (2003), and EPA proprietary data.

1	Acres planted are for calendar year following fumigation.

 2	Acres treated for California may be underestimated.  Substantial
acreage is reported simply as “pre-plant fumigation” or
“uncultivated agricultural land,” some of which could be for orchard
crops.

3	Effective or broadcast-equivalent rate.

Table 5 presents usage information for 1,3-D on California grapes. 
1,3-D has become the most important fumigant in vineyard establishment
as use of methyl bromide has declined.  Taken together, about 25% of new
vineyards are treated with some kind soil fumigant prior to planting.

Table 5.  Annual 1,3-dichloropropene usage on California grapes,
2001-2005 1.

Fumigant	Planted Acres 1	Acres Treated 2	% Acres Treated	lb Applied	Rate
3

(lb/acre/year)

Table and Raisin Grape	3,920	1,100	28.0	286,000	260.1

Wine Grape	10,860	1,200	11.2	373,000	306.8

All Grapes	14,780	2,300	15.7	659,000	284.6

Source:	Cal DPR (2000-2005), USDA NASS (2001-2006), USDA NASS
(2001-2004, 2006), USDA NASS (2003), and EPA proprietary data.

1	Acres planted are for calendar year following fumigation.

2	Acres treated for California may be underestimated.  Substantial
acreage is reported simply as “pre-plant fumigation” or
“uncultivated agricultural land,” some of which could be for orchard
crops.

3	Effective or broadcast-equivalent rate.

Pacific Northwest

Fumigation is practiced by 20-30% of growers establishing a vineyard
where another crop has been previously grown (O’Neal Coates, 2003). 
Fumigation is generally recommended when replanting new vineyards in
areas where vineyards had previously been established because nematodes
may be a problem.  While growers might wait a year and/or use green
manures as a preplant treatment to reduce nematode populations, it is
not economically feasible for them to allow sufficient time for old
roots to decompose and nematode numbers to decrease naturally; this can
take up to 10 years.

Metam-sodium is applied at 75 gallons product/acre (320 lb ai/acre) to
approximately 20% of previously cropped land intended for grape
vineyards (O’Neal Coates, 2003).  It is probably the first choice when
fumigation is needed (USDA CSREES, 2004).

Treatment of soils with 1,3-D and chloropicrin is applied to less than
5% of vineyard replant at a rate of up to 55 gallons product/acre (473
lb 1,3-D/acre and 96.25 lb chloropicrin/acre).  However, the typical
rate is approximately 27.5 gallons product/acre (237 lb 1,3-D and 48 lb
chloropicrin/acre).  Expense of the product is a limiting factor in its
use (USDA CSREES, 2004).

Northeast U.S. 

For replant sites previously planted to grapes, nematodes are routinely
sampled (Johnson, 2004).  Soil fumigation with 1, 3-D alone or with
chloropicrin or with metam-sodium is recommended if nematode populations
are high enough to damage plants.  Particularly in old vineyard sites,
deep and shallow fumigation is necessary to achieve good control.  In
Michigan, fumigation is used in the fall, prior to vineyard
establishment.

No mention of fumigation was included in various crop profiles (Muza et
al., 2002; Weigle et al., 2000a; Weigle et al., 2000b; Muza et al.,
1999; Brown et al., 1999).  It is likely that low price received for
juice grapes requires reduced costs of production, including
non-chemical alternatives in grape replant (Muza, et al., 2002).

Southern U.S. 

No information was obtained to indicate fumigant use for grape replant
in the southern U.S.  No mention of fumigation was included in various
crop profiles (Johnson et al., 2003; Smith and Becker, 2000; Cline et
al., 2005; Southern Region Small Fruit Consortium, 2005; Lockwood and
Hensley, 2002; Tuckey, 2000).

Given the use patterns, this analysis will focus primarily on the use of
chloropicrin, generally in conjunction with 1,3-D in California
vineyards, and, to a lesser extent, with methyl bromide.  We will also
examine the use of metam sodium in the context of a vineyard in
Washington to represent benefits accruing to growers in the Pacific
Northwest.

Target Pests

The primary reason for fumigation is to insure planting into soils with
minimal pest infestation.  In many sites, soil-borne nematodes, soil
pathogens, and fungi contribute to a poorly understood disease complex
called the replant “problem” or “disorder” and threaten the
establishment of healthy, long-bearing vineyards and orchards (McKenry,
1999).  Table 6 indicates the key pests associated with grape vines in
the major production regions of the U.S.

Table 6.  Target pests for fumigants in grape production.

State	Key Pests

California	Interactions between various pathogens and environmental
factors.

Nematodes: Meloidogyne (root knot); Mesocriconema (ring); Xiphinema
(dagger); Pratylenchus (root lesion); and Tylenchulus (citrus)

Pacific Northwest	Nematodes: Root Knot Nematode, Meloidogyne hapla;
Dagger Nematode, Xiphinema pachtiacum and X. americanum; Ring Nematode,
Mesocriconema xenoplax; Root Lesion Nematode, Pratylenchus penetrans;
Citrus Nematode, Tylenchulus semipenetrans

Northeastern U.S.	Nematode: Northern root-knot nematode (Meloidogyne
hapla)

Southern U.S.	None identified

Source:	UC Pest Management Guidelines—Grape Nematodes (2006); Crop
Profile for Wine Grapes in Washington (2003); Oregon State University
Extension (2006); Crop Profile for Labrusca (Juice) Grapes in Michigan
(2004).

Vineyards with the replant problem have several visible effects—the
first and most apparent is poor vine growth during the early years of
establishment (rejection component), and in some cases, a slow and
detrimental decline in root health and plant growth caused primarily by
pathogenic nematodes and fungi, which can lead to premature death
(McKenry, 1999).  Interactions with environmental features such as soil
composition, damage from insects, nutrient deficiency, or wind blow-down
are less well documented, but anything that limits early root growth can
predispose the vines to greater damage from subsequent agents.

The replant disorder can be of varying severity depending on pest
pressure, location, type of crop, soil texture, soil moisture, pH, or
other factors.  Planting nematode-tolerant rootstock is an important
management tool; however, rootstocks may only be tolerant to one type of
nematode while vineyard sites may harbor several species (O’Neal
Coates, 2003).  In many sites, fumigation may be necessary.  Replant
disorder effects can sometimes be reduced by planting a cover crop for
few years, but the delayed productivity may not be economically feasible
for some growers.  Generally, it is desirable to establish vineyards on
land previously planted with different crops (e.g., planting vines after
an apple orchard) to avoid severe replant problems, although
agricultural and economic considerations as well as the availability of
land may conflict with this recommendation.

Orchard Replant Practices

Typically, the first steps in the re-establishment of a vineyard are
removal of old vine and “ripping” or deep tillage of the soil,
followed by a fallow period or cover crop.  A fumigant application is
made where sampling for pests indicates it is necessary.  Fumigation
kills or reduces pests and remnant roots of previous plantings that
harbor pests.

According to the request for a critical use exemption (CUE) for use on
table and raisin grapes (by the California Grape and Tree Fruit League),
methyl bromide is applied in broadcast or strip treatments to 65% of an
acre with a formulation ratio of 67:33 (methyl bromide to chloropicrin)
with tarps.  Methyl bromide is used in California with a CUE label at
approximately 276 lb/acre (with 136 lb chloropicrin/acre).  Higher rates
were used in the past (see Table 1).  Text Box 1 presents the
information currently available to BEAD.

Text Box 1.  Methyl Bromide/Chloropicrin Fumigation Characteristics,
California Grapes Crops.

Rate:	276 lb methyl bromide/treated area with 136 lb chloropicrin/acre

Method of Application:  Shank, deep injected, i.e., more than 20 inches;
usually broadcast for table grapes, raisin and wine grapes may be strip
treated or broadcast

Fumigation Period:  typically Fall 

Surface Sealing:  Tarp

Field Size:	unknown

Area Treated/Day:  unknown

More commonly, growers may use 1,3-D with chloropicrin at 17 or 35%. 
Application rates depend on soil moisture and the product must be
applied to soils with a moist surface.  For soils with more than 12%
moisture, a strip application can be made at a rate of 350 lb 1,3-D and
191 lb chloropicrin per treated acre or the mixture can be applied by
covered drip line.  Tarps or soil seals are used.  Text Box 2 summarizes
this information.

Text Box 2.  1,3-Dichloropropene/Chloropicrin Fumigation
Characteristics, California Grapes.

Rate:	20 lb chloropicrin/acre (broadcast equivalent) [see Table 3]; 191
lb chloropicrin/treated acre with 350 lb 1,3-D/acre

Method of Application:  Shank, deep injected, i.e., more than 20 inches
or via drip line; broadcast or strip treatment

Fumigation Period:  typically Fall

Surface Sealing:  Tarp

Field Size:	125 – 300 acres

Area Treated/Day:  125 – 300 acres

Metam sodium or, rarely, metam potassium must be distributed into the
soil with water and is only accomplished in course-textured soils (i.e.,
this treatment will not be effective in clay soils) (Caprile, 2006). 
Use is very low.  Recommended rates are about 200 to 325 lb a.i./treated
area.

Alternative Control Measures

Various combinations of soil fumigants may be used, although their
relative efficacy depends on soil conditions.  Where both nematodes and
soil pathogens are a problem, three treatments are possible:  methyl
bromide with chloropicrin, 1,3-D with chloropicrin, and 1,3-D with metam
sodium.  On the light soils (e.g., coarse-textured soils such as sandy
loams) all will have similar efficacy.  On heavier soils (e.g., those
having a high component of clay), however, 1,3-D and metam sodium will
not penetrate as well and there will be less control of soil pathogens. 
1,3-D primarily targets nematodes, while chloropicrin and metam sodium
are more efficacious on soil pathogens.  Methyl bromide provides broad
spectrum control.  Growers may also apply an herbicide to kill remnant
roots of previous plantings, although generally sufficient fallow is
needed to reduce nematode populations.

California has set township caps for 1,3-D, which impose a maximum
amount that can be used in a given area per year.  Grape producers must
compete with many other users for an allotment.

Besides fumigation, there are other approaches to controlling replant
disorder.  One method is to select land that has not recently been
planted in grapes.  This is not often an option, however, due to limited
land area and agro-climatic conditions that tend to be conducive to
grape production.

Nematode-resistant rootstocks cannot eliminate nematode problems
(O’Neal Coates, 2003).  No single commercially available rootstock is
resistant to all nematode species.  Ramsey, Freedom, and some rootstocks
in the Teleki series may confer the broadest resistance, but these
mechanisms may not be permanent.  

It should also be noted that organic production does not preclude the
use of fumigation to establish a vineyard.  Organic production requires
three years without the use of synthetic chemicals, including
fertilizers and pesticides, prior to obtaining certification.  This
allows organic growers to fumigate at planting to improve establishment
and then transition to organic production during the non-bearing period
of growth.

Benefits of Fumigation

Planting vineyards requires a large investment of resources as well as
numerous choices to establish a long-bearing and productive vineyard. 
Many of the pests associated with these crops and fumigation
requirements are similar from crop to crop and location to location. 
However, management of these pests differs depending on particular crop,
soil type, climatic region, availability and cost of orchard land,
availability of resistant rootstock to specific key pests, and local
regulatory restrictions of some fumigants.  In general, when fumigation
is deemed necessary, few choices are available to the vineyard manager.

BEAD assesses the benefits of fumigation with a particular chemical by
comparing production under alternative approaches for controlling
orchard replant disease.  We will focus primarily on chloropicrin used
in combination with 1,3-D.  Use of methyl bromide has declined
substantially under the Montreal Protocol.  Metam sodium is seldom used
in California, but a common choice in Washington.  Metam sodium is a
viable alternative against which to measure the benefits of
chloropicrin.  Table grapes will form the basis of a case study because
these varieties are more typically fumigated.

The benefits of fumigation for vineyard replant can be measured by
future yields (vineyards require a couple of years to begin bearing)
when production may be adversely affected by poor vine growth and high
pest populations.  In addition, fumigant treatments result in healthier
plants.  The effects of the replant problem and nematode damage to young
vines are experienced within the first two years of vineyard
establishment and are commonly observed within the first year.  Costs
associated with individual plant replacement include delayed production
as newly replanted vines lag behind previously planted ones.  In more
severe cases, when replant disorder or high nematode populations are not
properly managed at the time of establishment, the entire vineyard might
be lost.  Because of the long life of a vineyard, optimal soil
preparation, along with appropriate rootstocks, is a priority for
successful grape production.

BEAD typically uses a partial budget analysis to estimate the impacts of
changes in production practices.  That is, we evaluate the consequences
on a typical acre of the crop grown, rather than attempt to assess the
impacts in the context of a whole enterprise, which could include
multiple crops under cultivation.  This approach allows the Agency to
compare estimated losses to net operating revenue, which is defined as
the difference between gross revenue and variable operating costs, on a
per-acre basis.  The analysis ignores fixed costs, which are highly
dependent on land ownership and the size and diversity of the grower’s
operation, and therefore difficult to define on a per-acre basis.  As
such, this analysis may understate the impacts as a percentage of the
grower’s income.

An analysis of a single year, however, does not capture the full benefit
of fumigation.  Establishing a vineyard involves considerable costs,
including the maintenance of the vines during the non-bearing years. 
This investment literally bears fruit in the future.  Therefore, another
approach to evaluating the benefits fumigation is to calculate the net
present value of the vineyard under different streams of costs and
returns.  Net present value (NPV) is a way of comparing different
investments by summing the discounted costs and returns over time to
calculate the value of the investment.  The formula for NPV is:

 

where t is the time period (year), T is the last year the vineyard is in
production and r is the discount rate.  This analysis uses a rate of 7%
to represent the private discount rate.  Since revenues and costs are
not adjusted for future inflation, all measures are in real terms.

Since the choice of discount rate is somewhat arbitrary, BEAD also
presents the internal rate of return (IRR), which is the discount rate
that makes NPV = 0.  One interpretation of this value is that it
represents the maximum rate of return on an investment that an
individual must be willing to accept before the investment would be
considered.  That is, if the IRR is 5%, only individuals willing to
accept a rate of return less than 5% would find the investment
worthwhile.

California Table Grape

It appears that the current practice for vineyard replant is to fumigate
with 1,3-D and chloropicrin.  Research suggests that using 1,3-D alone
would result in a yield loss up to 10%, depending on soil
characteristics and the suite of pests (EPA, 2005).  Yield loss would
range up to 5% if 1,3-D were followed by an application of metam sodium
in lieu of chloropicrin.  Table 7 presents the expected differences in
production and revenue for California table grape for various fumigation
treatments.  The benefits of chloropicrin are estimated in comparison to
fumigation with 1,3-D followed by an application of metam sodium and to
fumigation with 1,3-D alone.  Baseline yield for table grape and price
for the fresh market are averages of 2001-2005, reported by USDA NASS
(2002-2006).  Operating costs are taken from Vasquez et al. (2004). 
Harvest costs are assumed to be directly proportional to yield and BEAD
adjusts costs accordingly.

Table 7.  Gross revenue, operating costs, and net operating revenues,
California table grape vineyard at full production years.

	1,3-D + chloropicrin	1,3-D + metam

(% change) 1	1,3-D alone

(% change) 1

Yield (ton/acre)	8.9	8.6

(-3%)	8.2

(-7.5%)

Price  ($/ton)	720	720	720

Gross Revenue  ($/acre)	6,408	6,216

(-3%)	5,927

(-7.5%)

Operating Costs  ($/acre)	2,171	2,171	2,171

Harvest Costs  ($/acre)	3,699	3,588

(-10%)	3,422

(-15.0%)

Net Operating Revenue  ($/acre)	538	457

(-15.1%)	335

(-37.8%)

Source:	USDA NASS (2002-2006), Vasquez et al. (2004), BEAD calculations.
 Figures may not sum due to rounding.

1	Percent change in comparison to methyl bromide with chloropicrin.

As shown in Table 7, chloropicrin provides benefits of about $80/acre
annually due to increased productivity over the life of the vineyard,
compared to the next best alternative.  Metam sodium, although not
commonly used currently, would contribute another $120/acre of increased
revenue over the use of 1,3-D alone if chloropicrin were not already
available.

Methyl bromide, with chloropicrin, is used on a few vineyards.  Methyl
bromide penetrates heavier soils, i.e., higher clay content or lower
porosity soils, better than 1,3-D, but vineyards tend to be planted on
coarser soils.  However, some growers may not be able to obtain
permission to use 1,3-D under California township caps, which would
severely limit their options.  Table 8 presents the expected differences
in production and revenue for California table grape where 1,3-D cannot
be used.  According to McKenry (1999), yield losses of up to 20% could
occur on some highly problematic sites if no fumigation is conducted. 
Using metam sodium alone would result in higher yields than without any
fumigation, but would probably not be as effective as 1,3-D alone since
metam sodium is the least efficient at dispersing through soil.

Table 8.  Gross revenue, operating costs, and net operating revenues,
California table grape vineyard at full production.

	Methyl bromide + chloropicrin	Metam Sodium

(% change) 1	No fumigation

(% change) 1

Yield (ton/acre)	8.9	8.0

(-10%)	7.6

(-15%)

Price  ($/ton)	720	720	720

Gross Revenue  ($/acre)	6,408	5,767

(-10%)	5,447

(-15.0%)

Operating Costs  ($/acre)	2,171	2,171	2,171

Harvest Costs  ($/acre)	3,699	3,329

(-10%)	3,144

(-15.0%)

Net Operating Revenue  ($/acre)	538	267

(-50.3%)	132

(-75.5%)

Source:	USDA NASS (2002-2006), Vasquez et al. (2004), BEAD calculations.
 Figures may not sum due to rounding.

1	Percent change in comparison to methyl bromide with chloropicrin.

In situations where 1,3-D is not available, growers obtain substantial
benefits from fumigation with methyl bromide and chloropicrin.  The
increased value of production throughout the life of the orchard is
worth about $270/acre annually compared to metam sodium and about
$400/acre annually compared to no fumigation.

The analyses in Tables 7 and 8 do not consider the investment producers
must make in establishing an orchard and maintaining it through several
non-bearing years.  Table 9 presents the information on net revenue
through time, the NPV and the IRR for a table grape vineyard, assuming
that 1,3-D is available.  Field preparation costs are similar for any
type of fumigation, but fumigation costs differ according to the mix of
chemicals and the cost of application.  Chemical costs are average
per-acre cost of products, which incorporates typical application rates.
 Chloropicrin is applied with 1,3-D, but use of metam sodium requires
two applications, which makes it more expensive.  Vine planting costs
are identical regardless of fumigant.  In the second year, a trellis is
installed, which represents the majority of costs.  BEAD assumes that
some vines must be replanted the second year.  We assume that 2% or nine
vines are replanted following fumigation with 1,3-D and chloropicrin
(Vasquez et al., 2002); 4% are replanted with 1,3-D and metam sodium;
and 6% are replanted if 1,3-D alone is used.  The higher replant rates
represent the lower survival rate of vines if nematodes are controlled
but soil pathogens are not.  Vines begin to produce in the third year,
initially at 80% of production, but are not of sufficient quality for
the fresh market.  Grapes are harvested mechanically and sold for wine
(Vasquez et al., 2004).  Vineyards fumigated with 1,3-D alone are
assumed to last one year less than those fumigated with chloropicrin or
metam sodium.

Table 8.  Net operating revenue, net present value (NPV), and internal
rate of return (IRR) of a California table grape vineyard.

Year	Stage	1,3-D + chloropicrin	1,3-D + 

metam sodium	1,3-D alone

1	Field Preparation	-300	-300	-300

	Fumigation 1	-485	-638	-405

	Establishment	-1,634	-1,634	-1,634

2	Non-bearing 2	-3,710	-3,737	-3,763

3	Initial production 3	25	-7	-55

4	Full production	538	457	335

5-25	Full production 4	538	457	335

NPV (7% discount rate)	-629	-1,505	-2,432

IRR	5.7%	3.8%	1.1%

Source:  Vasquez et al. (2004), and BEAD calculations.  Net operating
revenues are not discounted; negative numbers represent costs greater
than income.  Net present value is calculated assuming 7% discount rate.

1	Fumigation costs include chemical costs, according to EPA proprietary
data, and application costs.  1,3-D and chloropicrin are applied as a
single product, but 1,3-D and metam sodium must be applied separately.

2	In addition to operating costs, non-bearing costs include replanting
trees.  The major expense is construction of a trellis system.

3	Initial production is 80% of full production (Vasquez, et al., 2004). 
Initial production is mechanically harvested and sold for wine.

4	Production ceases one year earlier with 1,3-D alone.

Table grapes do not appear to make a particularly attractive investment.
 Using a 7% discount rate, the NPV is negative.  The IRR for a vineyard
established with a fumigation of 1,3-D and chloropicrin is about 5.7%. 
The difference in NPV’s between fumigant treatments, however, is
substantial.  Compared to 1,3-D followed by metam sodium, use of
chloropicrin increases the value of the investment in table grapes by
about $900/acre.  Compared to 1,3-D alone, chloropicrin contributes
about $1,800/acre to the value of the investment.

Almost 500 acres of grapes are fumigated with methyl bromide and
chloropicrin in California each year on average.  This represents about
3.3% of the planted acres.  The benefits of fumigation therefore accrue
to about 26,700 bearing acres.  Assuming that this represents growers
who cannot use 1,3-D because of township caps, and that the benefits of
methyl bromide and chloropicrin are about $270/acre to wine grapes as
well as table grapes, methyl bromide and chloropicrin contribute about
$7.2 million annually to the California economy.  It appears that
chloropicrin is used on an additional 1,500 acres or about 10% of
plantings.  Ultimately, this represents nearly 81,000 bearing acres on
which chloropicrin provides about $80/acre in improved yields.  The
total value of chloropicrin to the California grape industry is
therefore about $13.7 million annually.  This does not include the
possibility that fumigating with methyl bromide and/or chloropicrin make
an investment in grape production viable for some growers.

Washington Grapes

For the portion of replant sites that are fumigated, metam-sodium is the
primary fumigant in this region, in part because of its low cost. 
Without metam-sodium, 1,3-D with chloropicrin would be the likely
alternative, although expense of the product may limit its use for wine
grape replant.  Fumigating with metam sodium saves growers $25-50/acre
according to EPA proprietary data on chemical costs.  For the region,
savings range from $16,500-33,000 annually.

Without metam-sodium and chloropicrin, 1-3-D would be the only chemical
preplant alternative for replant sites.  This would be an acceptable
treatment where nematodes are the key pest.  For sites replanting grapes
with only 1,3-D, there should be no appreciable yield losses that would
result.  However, at sites with significant problems with soil
pathogens, use of metam sodium would improve yields.  BEAD lacks
information on yield differences and the distribution of pests that
would be necessary to assess this situation further.

Conclusions

Soil fumigation with methyl bromide, chloropicrin, and/or 1,3-D provides
substantial benefits to grape producers in California.  Fumigation
targets soil pests, including nematodes and soil pathogens, which infest
vineyards and damage young vines when the vineyard is replanted. 
Fumigation increases survival of vines and improves yields throughout
the lifespan of the vineyard.  In Washington and Oregon, the problem is
more likely to be addressed with metam sodium because soils are
conducive to its use and it is generally less costly.  In other
producing areas of the U.S., nematodes, which can be controlled with
1,3-D alone, seem to be the more common problem.

Methyl bromide is valued in areas of California where township caps may
limit availability of 1,3-D.  Compared to fumigating with metam sodium,
using methyl bromide and chloropicrin results in higher yields worth
about $270/acre through the life of the vineyard.  Considering the area
treated and extrapolating to the affected bearing acreage implies that
methyl bromide and chloropicrin provide about $7.2 million annually in
benefits.  Chloropicrin, used with 1,3-D, contributes another $13.7
million annually in improved yields over production based on fumigating
with 1,3-D followed by an application of metam sodium.  While metam
sodium is not generally used in California, it provides unobservable
benefits as an alternative.  If metam sodium were not available, the
benefits of methyl bromide and chloropicrin would be substantially
higher, about $26.8 million/year.  These figures do not include the
benefits of higher survival, which can decrease the costs of
establishing a vineyard and could influence the decision of whether or
not to make the investment.

Metam sodium also provides benefits to grape producers in the Pacific
Northwest, primarily through decreased establishment costs.  On
appropriate soils, metam sodium can provide effective control of soil
pathogens and nematodes for $25-50/acre less than chloropicrin and
1,3-D.

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 The Office of Management and Budget suggests using a 3% and 7% rate
when evaluating the cost and benefits of government regulation, where 7%
is an estimate of the before-tax rate of return to private capital (OMB,
2003).

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