Forest fires threaten to disrupt crop insurance


California wildfires threaten to upend vineyard crop insurance as smoke threatens grape production in another record-breaking year of U.S. wildfires

Jack Roudebush

When a fire damages a vineyard, it can take up to five years for a vine to become fully productive again. But a fire doesn’t even have to hit the vineyard to have a devastating impact on the harvest.

Smoke and soot from forest fires can have an unpredictable effect on the taste of grapes, commonly referred to as “smoke odor”. The effects of the smoky taste can have a severe financial impact on vineyards. In 2020, winemakers in Sonoma County, Calif. Alone expected to lose at least $ 152 million from smoke-damaged produce, leaving about 30% of the harvest unpicked.[1]

Since the nature of winemaking makes it nearly impossible for producers to move to less dangerous territory, and the smell of smoke threatens vineyards even at great distances, winegrowers need to focus on protecting against the financial impacts of crops ruined by forest fires. However, as forest fires continue to worsen year on year, many farms are deemed too risky to be insured.

The Federal Crop Insurance Program (FCIP) helps producers subsidize increased premiums; however, vineyard and wineries fire insurance claims are denied at high rates. For example, in Sonoma County, insurers failed to renew 25% of the Farm Bureau membership, with nearby Napa County wineries facing a similar rejection rate.[2]

Caldor's fire continues to blaze through the Sierra wine country
Caldor’s fire ravaged the Sierra wine region in 2021

So what can winemakers do?

Protecting yourself from the impact of forest fires is one of the most important things today’s winegrowers can do. Consider the following:

Consult an FCIP approved agent specializing in vineyards. Winemaking can be overlooked by FCIP, as corn, wheat, and soy usually take precedence. Partnering with an insurance broker who understands the wineries and the requirements of FCIP coverage and claims is invaluable.

A specialist agent will know the complex underwriting requirements to properly insure wine grapes and show you how to file a claim for loss of quality in the event of exposure to smoke from your vineyard.

Enhance your FCIP policy with captive crop insurance. Captive crop insurance programs are insurance companies wholly owned and controlled by policyholders. They allow homeowners to retain certain risks at a lower cost and can provide coverage unavailable in the private market. They may not be available in the open market, but they can be additional protection in addition to FCIP coverage. This option is not for all producers, but is worth asking your broker.

In an emergency, take advantage of government-backed disaster relief programs. In September 2021, a legislative package comprising $ 10 billion for the re-authorization of the Forest Fire and Hurricane Compensation Program (WHIP) was enacted, available through local agricultural service agencies. If eligible, WHIP offers two years of FCIP coverage to growers nationwide, who can request assistance through their local U.S. Department of Agriculture service center.

Certainly, Mother Nature controls storms, wildfires, and the effects these natural disasters will have on a crop. But, being prepared for all potential scenarios in an effort to reduce and transfer your risk will make a big difference if your crop is damaged.

[1] Sonoma Index-Tribune, “Smoke damage from wildfires will cost at least $ 152 million», October 20, 2022.

[2] Robb Report, “Without insurance, many California wineries could face a disastrous wildfire season», July 13, 2021.


About the Author:

Jack Roudebush is a leading expert in crop insurance with the best brokerage Hub International. His 26 years of experience in the crop insurance industry includes owning his own insurance agency, serving as a director of the California Association of Winegrape Growers Foundation, and providing risk management services to certain of the biggest farmers in California.


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