Hop growers raise their glass to the craft beer industry

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Take a look at the taps lining the wall at your neighborhood tavern, or a stroll down the beer aisle at your local liquor store and your senses will most likely be overwhelmed. The thirst for craft beer has exploded in recent years bringing with it a seemingly endless amount of available beer choices.

However, it’s not just a beer drinker’s paradise. Hop growers are also reaping the benefits as the demand for small-batch brews has helped growers boost their revenues, expand their operations, and, in some cases, save their farms.

In fact, in 2015, the Colorado-based Brewers Association reported a 12.8% increase in craft-beer sales (compared to 0.2% for beer sales overall) and estimates the market at $22.3 billion—about one-quarter of the total U.S. beer market.

“Without the advent of craft brewing, a few large, corporate growers would be supplying all of the hops and local, family-owned farms like ours would have gone bankrupt,” says Diane Gooding, vice president of operations at Gooding Farms, a hop grower in Wilder, Idaho. “It’s saved the industry.”

As explained in a recent article, When Gooding came to work on her sixth-generation family farm in 2010, the farm grew four varieties of hops on 350 acres; the entire crop was sold to a single dealer that processed them for resale to big beer companies.

Over the past six years, the farm has expanded to 13 varieties of hops and 600 acres; the customer base has expanded, too and the farm now supplies hops to 12 different accounts; the majority sold right to local and regional breweries.

“It’s a much more dynamic customer base for us,” Gooding said in the article. “Now that there is more demand than supply, prices are going up and we’ve been able to reinvest in the farm for the first time since the ’80s.”

Craft brews use about five times more hops than traditional lagers produced by large brewing companies, which accounts for the surge in demand. Unlike big breweries, where hops are used to give beer its bitterness, craft breweries use “aroma” varieties of hops that have less acid (and impart less bitterness); each of the different varieties add a distinct flavor to the beer.

In 2016, there are 53,213 acres of hops growing nationwide—the most acreage ever in production and an 18.5% increase over 2015. Almost all of the hops production is in Washington, Oregon and Idaho but 29 states are registered to grow the crop.

For example, Ryan Hammer started growing hops in 2012. His first harvest from the quarter-acre parcel of land in Knightstown, Ind., was sold to a brewing company in Indianapolis.

“Craft brewers in Indiana were making local beers with hops from thousands of miles away,” Hammer explained. “When I started growing hops locally, the brewers loved it and wanted me to grow more.”

Hammer partnered with a local row-crop farmer to plant 10 acres of Cascade and Chinook varieties of aroma hops that craft brewers favor. Three breweries have signed on to purchase his next harvest and he plans to expand production on the farm to 100 acres by 2020.

“The craft brewing industry has helped boost the price of hops and that makes farming hops a viable option,” he said.

The price for hops has been on the rise since 2012, hitting $4.38 per pound, a 19% increase, according to the USDA. Although rising prices are good news for growers, it’s difficult to keep up with the demand from craft brewers as it takes three years for a new hop crop to produce a full harvest.

The wait can be longer for some of the specialty aroma versions where growers, unable to keep up with the demand, are declaring shortages, according to Brophy. In the meantime, craft brewers are signing multi-year contracts to lay their claim on the crops.

“Traditionally the market for hops has been pretty turbulent but the craft breweries are helping sustain and stabilize it,” Gooding said. “We see a great future for the farm that, for a while, we didn’t think would make it.”

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