Craft beer drives thirst for hops

By Mary Coffman

More than 84.6 million pounds of hops were grown in Washington in 2021, a 14.1% increase over 2020.

“We were all kind of surprised to see a record crop last year, after the spring heat dome, which hit when the vines were vulnerable,” said Maggie Elliot, science and communications director for the Hop Growers of Washington.

A historic heat wave enveloped the Northwest in June 2021, with temperatures topping 115 degrees, threatening to stunt the crop.

Fortunately, record snowfall in the Cascade Mountains filled the Yakima reservoirs in early June, allowing growers to nurture hops using precise irrigation practices and reducing the impact from the heat wave.

“The aroma varieties took the hardest hit from the heat,” Elliot said.

Aroma hop varieties aren’t as heat tolerant as the alpha varieties, she explained.

Aroma and alpha are the two kinds used to brew beer.

Alpha varieties provide the distinctive bitter bite to beer. Alpha varieties are often processed into extracts used by major brewers.

Aroma varieties contribute to the aromatic depth that craft brewers use to create unique flavor profiles. Aroma hops are often added to the beer near the end of the boiling process, providing the beer with a final layer of finish. Sometimes brewers will add the aroma varieties after the boil is complete, when the mixture is fermenting, which is a process known as dry-hopping. 

Demand spikes

Elliot said just a few years ago, Washington’s hop acreage was almost evenly split between alpha and aroma varieties. But with the expansion of craft breweries throughout the world, demand for aroma varieties has spiked.

“Now about 80% of the hops grown in Washington are aroma varieties,” she said. “Aroma varieties are one of the key areas of innovation for the U.S. hop industry and the American varieties meet the need and are highly prized around the world.”

According to a report released earlier this year by the Hop Growers of America, hop acreage increased throughout the Pacific Northwest growing areas in Washington, Idaho and Oregon.

Approximately 60,750 acres of hops were strung in the Pacific Northwest in 2021, an increase of about 2,100 acres, or 4%, from 2020.

Yields were expected to be at 1,915 pounds of hops per acre, an increase of about 8% year-over-year, with the total production in the Pacific Northwest reaching 116 million pounds.

All three Pacific Northwest states saw increases in the acreage planted during 2021, but Washington remains the largest growing region, accounting for 71% (about 43,380 acres) of the total U.S. hop acreage. Idaho grows about 16%, with 9,800 acres strung with hops. And Oregon grows about 7,600 acres, or 13%.

Elliot said Washington grows about 30% of the world’s hop supply and exports about half of the crop each year.

“Our exports have increased dramatically over the past 10 years,” she said, adding that there is increasing interest in aroma varieties.

“We are seeing interest in craft beer growing throughout the world.”

The industry is responding to that growth and interest by promoting hops grown in the U.S. and educating brewers across the globe about the unique qualities of aroma hops.

Elliot said they are focusing much of their energy on markets in Europe and also in Brazil.

“We see huge potential in Brazil, where the craft beer industry is growing dramatically,” she said.

Inflation takes a bite

While craft beer interest flourishes and markets increase, inflation is also impacting the industry and likely will result in consumers paying higher prices to enjoy their favorite adult brews.

The report notes that growers are facing substantial increases in production costs. Those increases are driven by the expansion of harvesting and production capacity to handle the doubling of strung acreage over the past decade, updating equipment, increased labor costs (including health care and other benefits), and inflation in the cost of fertilizer and other production inputs.

Administrative and operating costs associated with food safety and best practice compliance also have increased.

“It’s remarkable how much costs, like fuel and fertilizer, have increased,” Elliot said.

Many growers are under contract to sell their hops at a fixed price up to five years in advance, Elliot said, and inflation is going to hurt their margins for years to come.

And, of course, Covid-19 played a role in the higher production costs, with farmers having to distance workers during transport and operations and hiring additional workers to fill in for those who had to quarantine due to exposure. In many cases, they had to hire extra staff to perform worker health checks and to sanitize equipment, vehicles, tools and other surfaces.

Additionally, federal H-2A worker housing could not be used at full capacity due to social distancing requirements, increasing the costs to house guest workers.

Washington State University recently updated its Pacific Northwest Hop Cost of Production Study completed in 2020, estimating the annual cost of producing mature standard trellis hops using drip irrigation at $13,588 per acre (including variable and fixed costs, depreciation, etc.).

The report noted that increased inflation impacting supplies, fuel, labor and other inputs was estimated at 6.5% for 2021, which bumps up the cost of production per acre to approximately $14,471 when applied to the 2020 figure derived by WSU.

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