Hops growers add acreage to meet rising demand from craft breweries

MOXEE, Wash. – These are good times for growers like Ben St. Mary. He stood at his family’s farm southeast of Yakima recently and watched as employees built trellises where a new field of hops, a key ingredient in the flavoring of beer, will grow.

“We’re riding a pretty good wave right now,” said St. Mary, whose Black Star Ranch grows hops on 670 acres. “The whole craft beer thing is great.”

Hops are in short supply because of the dramatic increase in the popularity of craft breweries. That has growers in the Yakima Valley, which produces 75 percent of the nation’s hops, rushing to expand their production.

Hops are cone-shaped plants that are added to beer during the brewing process to add bitterness and flavor. In Washington, acreage grew 6 percent more in 2014 than the year before and is projected to rise 10 percent this year, industry officials said.

Craft beers typically use four to five times more hops in the brewing process than blander, mass-produced beers. The steady rise in the popularity of craft beers in recent years caught the hops industry, which had been in a slump, by surprise.

St. Mary understands brewers are worried about getting the hops they need. “It’s caught them off guard,” he said. Last year, Black Star Ranch added 35 acres of hops and this year it is putting in 45 more acres, St. Mary said.

Mitch Steele, brewmaster for Stone Brewing Co. in Escondido, California, agreed that “hop usage is outpacing supply.” Stone Brewing, one of the nation’s largest craft breweries, typically contracts several years out for its hops.

“When beer volume projections change, we get into trouble with some varieties,” Steele said. So far, Stone Brewing has been able to buy or trade for the hops it needs, he said.

But some brewers have had to curtail production because of the shortage, he said. It’s not just the hops plants that are in short supply, Steele said. More processing facilities that dry and bale the plant are also needed, he said.

Tomme Arthur, chief operating officer of The Lost Abbey in San Marcos, California, said their solution is to contract for more hops than they need.

“For the past three years, we have sold off our surplus to friends and other brewers in need,” Arthur said.

Paul Gatza, director of the Brewers Association, a Boulder, Colorado-based group that represents 2,500 craft brewers, said prices for hops are climbing as the supply remains tight. The group has a goal of 20 percent of market share belonging to craft brewers by 2020, up from 11 percent now, he said.

To grow hops, farmers must build 18-foot-tall trellis systems that the plants climb as they grow. It costs $8,000 to $10,000 an acre, and the crop is highly labor intensive.

Hops are not widely grown. The Yakima Valley, for instance, grows 25 percent of the world’s supply. Oregon and Idaho are the other big hop producers in this country.

Growing hops has not always been a good business in the past 20 years, when oversupply caused demand to plummet and some growers to go out of business, Hop Growers of America administrator Ann George said. Then came the worldwide economic downturn of 2008.

“We found out beer was not recession-proof,” George said.