I must admit, my idea of a good time is looking at hop statistics. The 2017 Hop Growers of America Statistical Report has been released and I’ve been pouring over the numbers recently. Here are a few of my take aways from after looking over the numbers.
The growth of hop acreage has slowed. In the 2016 report, overall hop acreage growth was up 17.9%, compared to 2017, with a reported growth of a more modest 5.3%. Since 2012, US hop acreage has increased 79.5% but that looks to be slowing down considerably.
Hop yields have increased as well as the price per pound. Good news for hop farmers as yields improved from 1,710 pounds per acre in 2016 to 1,960 last year. The report attributes this to less “baby” or newly planted hops in the field and better weather conditions in 2017. (It takes generally three years for a hop plant to fully mature and deliver maximum yield.) In addition to getting more hops per acre, hop farmers are getting more money for their hops, at $5.92 per pound in 2017 compared to $5.72 in 2016. I should note that different hop varieties will fetch different prices, so averaging this out is a little problematical, and some farms certainly made out better than others. The average revenue per acre jumped to $11,600 in 2017 from $9,800 the previous year, which the Hop Growers of American estimate that each acre of hops gained a profit of $785 per acre when an estimated $10,810 per acre of production costs are factored in. So hop farmers did well in 2017.
Now what’s good for hop farmers is often bad for brewers and consumers, since if the price of hops go up, breweries have to pay more for them and often pass those costs on to consumers in terms of higher prices. But considering the modest price growth, it’s doubtful this would create a disruptive shock that would affect a breweries ability to brew certain beers, or result in sudden pricing increase to consumers. A thriving network of hop growers allows for innovation and greater willingness to take risks on exotic hops that might product the next killer IPA or be a dud. So in general, I think these numbers are sign of a healthy hop market that should also be good for both breweries and consumers.
Hop growing outside the Pacific Northwest has really slowed. The Pacific Northwest (Washington / Idaho / Oregon) accounted for 95.5% of the total hop acreage in the United States, so contributions from other states are tiny to the overall market. But for people like me, eager to see breweries across the country source local hops, and the potential for different hop growing regions to express their unique terroir, it’s something I pay attention to.
In 2016, hop acreage outside the Pacific Northwest grew at a gaudy 64.9% clip. In 2017, this growth still outpaced the overall hop industry, but was way down from 2016, at 18.9%. A few states outside the Pacific Northwest that had small but booming hop farming activity screeched to a halt in 2017. This includes my home state of California, which had zero growth in 2017 despite growing at about 50% each of the previous two years, and Colorado which also showed zero growth in 2017 despite nearly doubling hop acreage in 2016. California and Colorado accounted for 130 and 200 acres respectively, which isn’t very much. But for people hoping to see new hop growing regions emerging, it was disappointing to see a couple of promising hop growing regions stalling out.
Michigan may become next significant hop growing region. The one bright spot outside the Pacific Northwest is the state of Michigan, which now totals 810 acres of hops under cultivation, a 24.6% increase over last year. This is significant as it appears Michigan’s hop industry is gaining critical mass. As Bart Watson, Chief Economist explained in an e-mail, a big issue facing farmers outside the Pacific Northwest is “…a lack of processing infrastructure, which is really expensive, and limits the scale they can get to. Michigan looks like it’s largely overcome that threshold.”
I’ll mention the states of New York, Wisconsin, and Minnesota also continued to show strong growth, but at acreages of 400, 297, and 120 respectively, it will take a while before they show the same promise seen in Michigan.
It ought to be interesting to see what developments occur 2018.
(Hop photo from Wikipedia Commons)