Pacific Northwest hop acreage still climbing
MOXEE, Wash. — Hop acreage is increasing for the fourth straight year in the United States and for the third year globally.
U.S. hop acreage is projected to increase by 6,000 acres this year, a 13 percent rise. That follows a 19 percent last year, according to the Hop Growers of America.
The 13 percent is a conservative estimate and could be higher by the time final figures are available. Last year’s initial estimate was 15 percent, but the actual increase was 19 percent, said Jaki Brophy, Hop Growers of America spokeswoman.
Of the increase, 5,400 acres are in Washington state, Oregon and Idaho and 600 acres are in other states.
With the new acreage, the U.S. total is 51,275 acres, widening the gap with Germany, the other leading producer at 45,468 acres. Germany’s acreage is up 10 percent.
The worldwide increase is 8,347 acres, up 6.7 percent, which was predicted by the International Hop Growers Convention in Paris on April 18. The convention estimates 2016 production at 232 million pounds globally, up from 190.4 million in 2015. In the U.S., the estimated production is 97 million pounds, up from 80.2 million in 2015.
Of the U.S. estimate, 60.6 million pounds are aroma varieties and 36.4 million pounds are alpha. Aroma varieties are mainly used by craft breweries and alpha are mainly used by large brewers.
Drought in Europe reduced the worldwide production in 2015. U.S. yields are expected to be better due to more acreage coming into production and no drought in the Yakima Valley, where about 70 percent of the U.S. crop is grown, Brophy said.
The acreage increase continues to be driven by the growing number of craft breweries, said Ann George, administrator of Hop Growers of America and the Washington Hop Commission.
The number of breweries in the U.S. reached 4,144 at the end of November, topping the historic high of 4,131 in 1873, according to the Brewers Association in Boulder, Colo.
Brewery openings exceeded two a day in 2015 with 15 states each now home to more than 100 breweries, the association said. California, Oregon and Washington are among the top 15.
The U.S. inventory of hops was 131 million pounds on March 1, up 10 percent from a year earlier. For perspective, that compares with 190.4 million pounds harvested worldwide in 2015.
“We are finally beginning to see some signs of breathing room in the supply chain, especially in popular craft varieties hard-hit last summer, although we have not reached comfortable levels quite yet,” said Pete Mahony, vice president of supply chain management and purchasing at John I. Haas in Yakima.
Early maturing aroma varieties in the Yakima Valley experienced lower yields last year due to drought but there’s adequate water this year from a larger mountain snowpack.
It looks like a good season and more breweries are buying hops by contract versus the spot market, resulting in more breweries reliably having their needs met at a known price, George said.
“We hope to see this continue, reducing reliance on the spot market, which acts as a good buffer for unanticipated need and yield variances,” she said.
Too much spot market supply causes market price volatility and more grower risk, she said.
Forward contracting also allows growers to secure necessary capital from lenders, as they can prove their crop is sold, George said.
That’s crucial for expansion estimated at a minimum of $40,000 per acre, including the cost of land, growing supplies, rootstock, labor, equipment, harvesting, cold storage and packaging, she said.