Safeguarding Southwest Michigan grape growers: The Grapevine Insurance Program

Crop insurance is available in select Michigan counties, deadline for signup is November 1, 2023.

for decorative purposes only - View of grapevine trellises going downhill towards fall-colored woods with a lake in the background

Michigan's grape growers face unique challenges, especially when it comes to unpredictable weather conditions. The volatile nature of Mother Nature can lead to severe losses, impacting vineyards and jeopardizing livelihoods. To address these concerns, the USDA Risk Management Agency has introduced the Grapevine Insurance Program, which will provide support to many of Southwest Michigan’s grape growers. In this article, we delve deeper into this program, offering essential insights for local grape growers looking to protect their investments.

Coverage tailored for Southwest Michigan

The Grapevine Insurance Program, set to launch for the 2024 crop year, brings a ray of hope to Southwest Michigan's grape growers. It provides coverage against an array of weather-related perils, including freezes, hailstorms, floods, fires and even irrigation failures.

This program caters to the unique needs of Southwest Michigan's grape varieties and growing regions. However, to qualify for this insurance, it's imperative that the grape variety is well-suited to the specific region where it is cultivated. This ensures that the insurance coverage aligns with the local conditions, offering greater resilience.

Understanding the "Mortality Policy"

The Grapevine Insurance Program operates as a "mortality policy." This means that losses are compensated when grapevines are either deceased or damaged to a degree where they cannot recover within 12 months. This coverage ensures that vineyard owners are protected against the most severe impacts of adverse weather events.

Customized coverage and premiums

Michigan grape growers can tailor their coverage to suit their unique circumstances. Grapevines are covered at different reference prices for the different life stages of the plant. If an area has at least 75% of its vines in the same life stage, that whole area can be considered a block at that stage. The Vine Reference Price (VRP) stages and price levels are as follows:

  • Stage 1: Transplant up to 12 months - $15 reference price (VRP)
  • Stage 2: 13 through 48 months after transplant - $22 reference price (VRP)
  • Stage 3: 48 months or older after transplant - $32 reference price (VRP)

Coverage levels range from 50% to 75%, allowing you to select the level of protection that fits your needs. Moreover, you can choose a price election from 1% to 100% of the VRP, providing flexibility in your insurance decisions. The program offers subsidies for premiums at a rate of at least 55%, making it more accessible to Michigan grape growers.

Coverage options are available in basic, optional and enterprise units. Two optional coverages are also available for an additional premium. The Occurrence Loss Option (OLO) will pay out on vine losses as low as five percent. The Freeze Protection Option can be used if there are certain freeze protection practices in place on the farm. Reach out to your crop insurance agent for more specifics.

Availability in Michigan

Michigan grape growers will be pleased to know that the Grapevine Insurance Program is available in Berrien, Cass, Kalamazoo and Van Buren counties. It's essential to act swiftly, as the deadline for enrollment is November 1, 2023. For comprehensive information, consult the Grapevine Fact Sheet released in August. Additionally, reach out to your crop insurance agent for personalized guidance and assistance.

Calculating loss

Understanding how loss is calculated is crucial for grape growers. Consider this example:

Suppose you opt for a 75% coverage level without the Optional Unit Deductible (OLO). You own 100 percent of 3,000 stage three grapevines within your unit. The VRP for stage three grapevines is $30, and you elect 100% of the VRP.

In this scenario, the unit deductible amounts to $22,500 (3,000 stage three vines x $30 x 25%). Consider a situation where, due to an insured cause of loss, 1,000 vines are destroyed. The damage value stands at $30,000 (1,000 vines x 100% damage x $30 per vine). Consequently, the indemnity for the unit is calculated as follows:

  $ 30,000  Damage Value
- $ 22,500  Unit Deductible
  $   7,500   Amount of Loss
x      100%  Share
  $   7,500   Indemnity

x      100%  Share
  $   7,500   Indemnity

The Grapevine Insurance Program is a beacon of support for Michigan grape growers, offering them the means to mitigate the unpredictable challenges posed by weather-related events. By familiarizing themselves with coverage options, eligibility criteria, and loss calculations, vineyard owners can make informed decisions to protect their investments. As part of our commitment to Michigan's agricultural community, Michigan State University Extension provides valuable information on crop insurance policies. For a comprehensive understanding of how crop insurance functions and the diverse programs available, refer to MSU Extension Bulletin E-3426, "Insurance Options for Fruit Growers." We also invite you to participate in our Farm Policy and Risk Management webinar series. The Fruit session, which will visit the grapevine program, is scheduled for October 17 at 6:30 p.m.

The authors would like to acknowledge Cory Blumerick and Jeff Sparks of Greenstone Farm Credit Services for providing details for use in this article, including stage and VRP information.

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