Hope on the Hopvine

More hop acreage being added in Washington State

Some Yakima Valley hop growers are pulling other crops to add new acreage to hops in response to a worldwide shortage that caught everyone – brewers, dealers and growers – by surprise.

A decade of oversupply and low prices that sent acreage plummeting by more than a third is over, at least for now.

Washington, Oregon and Idaho grew hops on 30,911 acres last year, according to industry figures. Growers are feverishly reconditioning yards and adding new land at an unheard-of pace. Growers are receiving multiple-year contracts with prices front-loaded to help them shoulder the estimated $6,000-per-acre cost to plant yards and also upgrade equipment.

Growers couldn’t make investments like that when prices were depressed.

“It’s basic economics,” observed Ann George, administrator of the Moxee-based Washington Hop Commission. “When everyone started making orders, we found we had a shortage. The price went crazy. People are willing to spend large sums.”

Northwest hop acreage, which expanded by about 2,000 acres last year as the lack of supply became apparent, could grow by another 5,000 acres this year.

Ralph Olson, general manager of grower-owned HopUnion of Yakima, a buyer who deals primarily with smaller craft brewers, thinks the figure may be closer to 8,000 acres by the time all is said and done. That would be a jump of nearly 25 percent in acreage in one year.

Comments

  1. twoodward15 says

    And then we’ll have a surplus and they’ll stop growing them and then we’ll have a shortage and they’ll start growing them and then we’ll………. well, you get the point. Adding that much land to grow hops is only going to get the farmer back into the same position they were in before which will in turn hurt the craft beer industry again. This is not going to be a healthy cycle unless some of the farmers get off the band wagon. It’ll be great money for them for a few years but it will die down and the cycle will begin again. It’s great for a few years for the micros. They can get cheap hops and get the products they WANT to brew out inot the hands of consumers that have been waiting for the one-off brews, but in the end this could hurt all of us again. There needs to be checks and balances in the system but there really isn’t an easy way to do that in this situation. Let’s all just hope this doesn’t happen again. Hopefully the farmers make it big too!!!!! I always like to see the farmers doing well.

  2. MikeJordan says

    According to the hop supply panel last week at CBC most of the acreage will be super high alpha. I think they mentioned about 1,000 acres designated for aroma varities. I think the groweres are taking a much more conservative step than they did in the mid ’90’s in hopes that there won’t be an abundance and “low” pricing in 2-3 years.

  3. lhall says

    And virtually none of the new acreage is Cascades. Only about 800-1000 new acres of aroma hops, the rest mostly CTZ.

  4. twoodward15 says

    CTZ? I didn’t think there was much of a shortage of them. It seems like I can’t find cascades at the time though. I guess there is more money in CTZ though.

  5. nwcw2001 says

    I don’t think that it was a shortage issue when it comes to planting more CTZ’s I think it is an Alpha issue. They are trying to make sure they have tons of the high alphas to keep up with the trend of blow the back of your head off IBU’s.

  6. Moonlight says

    Hop growers are farmers first of all. They want to get the most dollars per acre. Can’t blame them can you? Alpha’s are the biggest value part of the hop in the international hop market. CTZ’s give the best alpha per acre, so the best dollar per acre. The only way you will get Cascades is if they pay higher price per acre than CTZs. How much will you pay for ’em?…We’ll find out this year.

  7. practicalpants says

    Also, aren’t the higher alphas used to make extracts and such? This would mean less actual hops used per IBU making the cost per unit cheaper for those who buy hops in order to process them into extracts.

    For a farmer with high alpha crops, that means you have two main customers, those who make the high IBU beers at the craft level, and those who make the extracts for larger breweries.

  8. gitchegumee says

    Correct me if I’m wrong, but I believe that US-grown high alphas going to US craft brewers is statistically insignificant. US-grown hops are distributed throughout the world, where beer consumption is up. US craft brewers are not much of a market influence and we’re lucky to have Hopunion as an advocate. That being said, any increase in acreage is welcome and will eventually lead to availability of more of the minor varieties of hops. I think! Cheers!

  9. sbradt says

    At the hop panel at the CBC, supply and demand kept coming up as part of the explanation for why some varieties are or aren’t getting planted. What hasn’t been explained is why there is still not a response to the demand for aroma varieties. This year has demonstrated that there is a demand and that brewers will pay a premium to get many of the popular aroma varieties. It has been made abundantly clear that many of these provide lower yields to the farmer, have greater susceptibility to disease, lower alpha, etc., but no one on the supply end has spoken up to say “Here’s the deal, keeping all things equal in the agribusiness arena, if you want cascades, fuggles, willametts etc., they are going to cost 25-35% more than CTZ becuase of the simpl economics of the growers” or “There’s going to be a surcharge on these varieties based on historic yields and alphas compared to CTZ or other high alpha varieties” There’s a surcharge for everything else right now anyway! Supply and demand doesn’t work as an explanation when there’s a demonstrated demand and still no move towards increasing the supply. I appreciate that farmers don’t want to take risks on planting crops that may not have lasting demand, but I think several of these aroma varieties have proven to have legs under them.