Good Beer Hunting

U.S. Hop Production Sets New High of 87 Million Pounds

Driven by growth in the Pacific Northwest, farmers harvested 87.1 million pounds of hops in 2016, up 11% over the year prior, according to the U.S. Department of Agriculture. While the yield was impressive, the value of the plant itself exhibited an even more remarkable development. The price per pound rose 31% this year, but the crop nationwide totaled $498 million, per the agency. That’s a 44% uptick in valuation, smashing an historic high that was only set last year. The rising financial judgment can be attributed to “the continued trend to shift hop production from Alpha varieties to Aroma varieties that are higher in value,” the department said.

The unprecedented hop yield comes at a somewhat paradoxical time relative to what’s going on in the beer industry. Craft did continue to grow in 2016, but at a slightly depreciated rate from the torrid pace we’ve come to assume the last half-decade. Meanwhile, the global beer industry at large is actually expected to show declines. This has left the hops industry to enjoy its gains with a bit of cautiousness.
“We have seen the downside of this market before due to oversupply,” said Ann George, executive director of Hop Growers of America, earlier this summer. “We encourage responsible contracting to ensure a stable market in terms of price and availability.”
Now, it goes without saying that the markets for beer and hops are inherently joined at the hip. No less, if beer slows, there are some other open roads for the hops industry that would foster growth.
And the vast majority of U.S. hop production comes from Washington, Idaho, and Oregon (Washington alone was responsible for 75% of the U.S. hop crop in 2016). And taking into account critical harvesting factors such as climate and geographic location relative to the equator make it nigh impossible to imagine another domestic market ever naturally broaching the same heavy weight status.

Still, as we reported earlier this fall, hop acreage outside of the Pacific Northwest grew 75% in 2016, and states like Maine, Michigan, New York, Florida, and Virginia are emerging as viable—albeit miniscule—hop markets. They aren’t likely to spur record setting growth, of course. But the more hops under trellis outside of the three states that carry the bulk of the weight, the less stress for all (theoretically anyway).
Furthermore, it’s entirely possible that the most popular hop of the future hasn’t even been bred yet. Consider the fact that Simcoe was one of the six leading varieties in Washington, a state that produced 65 million pounds alone. The hop is so ubiquitous today it’s easy to forget that it began, as the majority of new hop varietals do, as a disappointment. Indeed, in the early 2000s, the varietal, first bred by Select Botanicals, had been reduced to two acres and neared extinction. [No one wanted it!] Then Pliny the Elder happened, and now, there is nearly 3,000 acres of land dedicated to growing it—one of the most sought after hops in existence.
—Dave Eisenberg
2016 Hop Production Up 11 Percent From Last Year [U.S. Department of Agriculture]