May 21, 2015
Michigan growers study benefits, challenges of hops

Michigan hop producers are poised to make a larger commitment to a market driven by demand from a burgeoning craft beer industry that is willing to seek out locally sourced product.

But according to some industry specialists, it will continue to be a slow climb for Michigan growers. One significant challenge comes from a shortage of processing outlets in the state.

The Catch-22 scenario – in which more hop production is needed to justify investments in more processing facilities – has many new and potential hop growers, including traditional specialty crop producers considering a supplemental endeavor, thirsting for more information on the commodity.

The Great Lakes Hop and Barley Conference in Grand Rapids, Michigan, provided that opportunity. The conference, held in April, featured separate sessions for hop and barley growers and brewers. Several speakers discussed the market outlook, horticultural practices, pest and disease control, harvest and postharvest practices and nutrient management.

A popular session involved the cost of hop operations and production considerations, presented by Rob Sirrine, a Michigan State University Extension educator.

Sirrine said many Pacific Northwest hop producers are large enough to have their own processing facilities.

To keep costs down, “the investment needs to be put in processing,” Sirrine said. “The economies of scale will always be a problem, but if we can get the cost down a little bit for hops then I think we can compete.”

The investment for planting a field of hops can range between $12,000 and $15,000 per acre without any processing equipment, Sirrine said.

“You could easily eclipse hundreds of thousands of dollars on 5 acres to get the hops into a form that brewers want,” Sirrine said. “It’s going to be expensive to do it at scale.”

Pointing to data presented at the conference by Bart Watson, chief economist of the Brewers Association, Sirrine said the demand for hops is increasing.

“(Watson) said by 2020 we will need about 15,000 more acres of hops,” Sirrine said. “How does that relate to a Michigan grower or someone looking at getting into hop production in Michigan? That’s kind of the question right now.

“There’s definitely a demand from folks who are brewers in the state, and the number of brewers keeps increasing – I think we’re over 200 right now – so there’s a demand,” Sirrine said.

The local-use movement could be further aided if Michigan chooses to follow the lead of New York state in requiring brewers to use product grown within the state.

Michigan opportunities for hop, barley and yeast producers could flourish, if producers can meet the quality standards local breweries are accustomed to receiving from out-of-state suppliers, Sirrine said.

New Holland Brewing, one of the largest craft producers in west Michigan, recently announced it will brew its specialty beers with nothing but Michigan ingredients.

Big challenges

What are the key considerations in growing hops?

“One, do you have somewhere to sell it – that’s super important,” Sirrine said. “You don’t necessarily have to have a contract but you should have an agreement with a brewer to produce a certain quantity of hops over time.

“The other thing to think about is what varieties. From a grower’s perspective, obviously you’re going to want something that yields really well because it’s more money in your pocket. On the other hand, you also want something that has disease resistance; so like a Cascade would be a good hop. (With) Centennial, you’re going to have to put more time and effort into it because they’re susceptible to downy mildew.

“There’s different factors to think about,” Sirrine said. “It’s not just the growing of the plant. There’s a lot of successful and great farmers out there. It’s easy to ruin a hop cone after you’ve already harvested it. The harvest process, the postharvest process, the palletizing, the infrastructure that goes into that, cold storage, becoming a certified facility, having a vacuum sealer, packaging. These are costs that happen postharvest that a lot of folks don’t think about.”

It’s not difficult to pinpoint the advantages Pacific Northwest producers have when it comes to hop production, Sirrine said.

“Climate’s the one big thing out there,” he said. “They’re already growing (in early April). We don’t even have anything sprouted in Michigan. I think we can make up for that. We’re right at the perfect parallel, 45 degrees, which is what the hop grows best at right around the world – it’s 40 to 55 degrees parallel. So we’re smack dab in the middle of that. We are in an ideal environment. We have ideal soils here. The issue is the humidity for the most part. In Yakima (Washington), they can get yields in their first year. They get about eight inches of rainfall a year. Here, we probably got close to that in the last three days.

“Humidity increases the incidents of disease,” Sirrine said. “So probably our input costs in terms of disease management are going to be higher than they are out west. That being said, I think the ways that we overcome that are by having an awesome brewers’ guild and craft brew sector that are willing to bet on Michigan hops, and they’re willing to pay more for Michigan hops if the quality is there.

“Quality is crucial here; brewers want pellets,” Sirrine said. “You cannot scrimp on establishment. Postharvest is very important. There are high initial and annual costs and you can’t underestimate the amount of labor required.”

He also pointed to the need for picking and processing equipment if a grower is planting more than one-third of an acre.

“Line up your supplies well in advance. Again, how will you sell your hops and to whom? And you will need a price premium to do organic.”

More information on hop production in Michigan is available here.

Gary Pullano

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