Why we?re not starting a hop farm

Sep 8, 2008   //   by Jeff   //   Blog, Brewing, Hops  //  4 Comments

Last week we harvested our first hops from our vines, and were quite pleased with the yield. I was thinking we?d get 1-2 lbs of hops based on the amount we pulled off. But after a few days of drying, the final weight was just about 8 oz. But my dreams of hop farming were not yet dashed, until our friend West sent us, as he often does, his latest beer related article find.

The Wall Street Journal last week ran an article about a surge in the number of people interested in starting hop farms. Why? Because ?for years, a world-wide glut of hops resulted in prices that were too low for U.S. growers to turn a profit.? So now everybody and their mother (Joel?s mother included) is gunning to start a hop farm. Prices for hops have gone up 4-6 times in the past few years, and last year?s price increases resulted in a total value of $169 million, up from $118 million the year before.

Sounds good, right? So why not go be a hop farmer? The general consensus is that hop prices will come down substantially over the coming 12-36 months, just about the amount of time it would take to get a legit hop farm up and running. And with some serious capital costs in equipment and land, I?ll pass and stick to brewing beer…

…which we’ll be doing tonight. The IPA has been flying out of the fridge fast and furious, so we’ll be brewing it again this evening. We’ve got the Wit and a new variation of Drafty Kilt on draft, so drop us a line if you need directions.

  • http://geistbearbrewing.com Thomas

    Only one quote from Ralph Olsen which indicates the price will drop, but if you listen to the hour long interview he did on the Brewing Network http://thebrewingnetwork.com/shows/The-Sunday-Session/The-Sunday-Session-12-02-07-Hops-and-Malt-Shortage , while prices will level off, they will never drop to the preshortage level.

    I think that if you have the spare land and you are a production brewery you should absolutely grow your own hops. Even it only goes into a couple beers a year, you can market it as a Fresh hop or self produced beer, more sustainable and green, heck even if you aren’t into the idea it makes sense marketing.

    But yes the investment costs are high and rate of return doesn’t favor new market entries.

  • http://www.fermentedlychallenged.com Chipper Dave

    It’s nice to hear that the so-called hop shortage may only be with us for another year or so and that prices will be (hopefully) coming down again soon. I’d still encourage new regions in the states to experiment with different hop varieties and see what tends to grow best in their area. That way if we get people growing hops all over, then no one region that ends up with a bad year will ever affect our hop prices again. I’d welcome a glut of hops as it will encourage homebrewers and craft breweries to continue the experimentation with hops. While it may not be as profitable to grow hops in the long run, it will at least keep us beer lovers happy.

  • http://blog.homebrewbeer.net Bryon

    Got to keep the farmers happy too though…

  • http://www.fattymattybrewing.com/ Matt Sweeny

    One of my favorite responses from a brewer (who had been seriously planning on commercially growing their own hops) revolved around these same arguments. I will admit that it is true, growing hops is not easy, it is hard work and you may not make a ton of money either. I just think that there are more important things to life than working for the man. Slower, smaller and local. Be able to slow down and enjoy life. Not wanting to grow as a company just for the sake of growth. Not wanting to end up a multi-national company.
    Serving the local community is more important than serving global markets. Concerned with environmental impact. These are what make running your own business important.