November 19, 2009 Vineyard Start-Up Costs Can Add Up, But The key Is Protection

Vineyard Establishment Costs can be thousands of dollars per acre

In our last post, I talked about the multi-year gap between starting a vineyard and having government-subsidized crop insurance kick in to protect your vineyard investment. Live Asset Insurance offers protection for those vineyard start-up costs that would otherwise be left exposed to potential disaster.

One of the examples given to attempt to quantify vineyard establishment costs was the seemingly endless variety of products offered by a company like Orchard Valley Supply. Purchasing the infrastructural materials they offer would costs thousands on their own, not to mention the cost of acquiring land; getting that land into growing condition; installing things like trellises and irrigation system; and more.

So what would be typical vineyard establishment costs?

The real answer is, “It depends.” But that would make for a very short blog post.

It really does depend on many factors – size of land, geographic location, desired production amounts, etc. The folks with the Arizona Wine Growers Association posit the following:

The capital requirements needed to become successful in the wine business depends on ones goals. The cost can range from as a few thousand dollars for those who own an acre of vines and sell their grapes to a winery, to millions of dollars to develop vineyards, a winery and market a brand of wines. The Per-Acre cost of bring a vineyard into production is estimated at between $6,000 and $15,000. It will take 3-5 years for grapes to mature enough to be used in wine production. There are additional cost for land, equipment, machinery, staff, consultants, marketing and other expenses.

Just to reiterate – that between $6,000 and $15,000 per acre to get a vineyard into production.

So, For A 15-Acre Operation, The Vineyard Start-Up Costs Would Be Significant

The AWGA also created a draft of Vineyard Investment Costs for a 15-acre vineyard with 10 acres in production.

According to their numbers, nearly $300,000 later, you’d have yourself 10 acres of productive vineyard. Now, remember that the first three to five years of that time, your investment is not eligible for coverage under the federally-backed crop insurance programs. That would leave you with hundreds of thousands of dollars invested with no protection.

Vineyard Start-Up Costs Are Too Big To Leave At Risk

Now that you have some sample numbers to ponder, the need to protect what you’ve purchased becomes too clear. With the vineyard insurance that Live Asset provides, you can protect your sizeable vineyard investment during a vulnerable period. It wouldn’t make sense not to protect the future of your vineyard.