US HOP ACREAGE IS HOPPING

HOPS ARE BIG business in this country. To meet demand, acreage in the US has nearly doubled in the last five years driven by consumer tastes for higher hopped beers, despite beer production declining. In 2O16 acreage grew by 17% to 52,963, with an additional 5185 acres expected to take the total to 58,148 in 2O17. According to figures released by Hop Growers of America, US acreage of hops in 2O12 stood at 29,683. “To put it into perspective, the US acres added in the last five years is larger than the total acreage of any other hop-growing country in the world, outside of our own and Germany, the two largest hop-producing countries,” said Ann George, the Executive Director of Hop Growers of America (HGA). “Further, our estimated 2O17 acreage increase (a 9.8 % growth) by itself is larger than other individual countries’ total acreage outside of the US, Germany, and the Czech Republic.” The US has been the largest hop producer since 2O15, when it over took Germany’s total hop acreage for the first time. The third largest producer is the Czech Republic with 11,8OO acres, followed by China with 4942 acres. However, its continued rise is not without concern. While the US hop market is far more stable than in past years, benefitting from high demand and a diversified customer base, the HGA has urged producers to remain “responsible and realistic” when contracting hops to ensure supply and demand are kept in balance. “When a brewery has a hop variety they depend on and is crucial to their operation, it is dangerous to rely solely on the spot market,” said Patrick Smith, vice president of hop grower B.T. Loftus Ranches, Inc. “Growers rely on forward contracts to plan their acreage for many years out into the future. However, contracting an excessive amount above their needs is not wise either as brewers can be left with expensive hops that they may not be able to sell to other brewers. Over-contracting can also lead to a surplus in the market which tends to discourage future investments in productive capacity and leads to increasing market instability. A surplus can be just as disruptive to the market as a shortage.” In addition to acreage increasing in the US, stocks left in storage with brewers, growers and merchants are increasing as well, with the USDA NASS March 2O17 report showing a 9% increase in 2O16, and a 7.5% increase the year before that.