In a recent release, Hop Growers of America (HGA) deemed the 2015 hop crop “good” overall. Despite climatic challenges, this year’s harvest exceeded 2014’s by 11%, and most hop contracts are expected to be fulfilled by U.S. growers and merchants.
(Some reported numbers vary slightly because some reports reflect acreage and some reflect yield, and they’re not necessarily congruent.)
The U.S. now produces approximately one-third of the world’s hops, and close to three-fourths of the country’s hops are 
grown in Washington’s Yakima Valley alone. In 2014, Washington’s hop acreage totaled 28,858. This year it increased to 32,158 acres.
Back in April of this year, when we had roughly 600 fewer breweries in America, we wrote about how craft breweries’ demand for hops has been putting some strain on hop growers. Apparently, growers are responding to that demand.
According to this article, hop acreage in the Pacific Northwest increased 48% in just the last three years. Perhaps some of that growth was in response to the hop crisis we had some years back, but the number of breweries in the U.S. has also exponentially increased to more than 4,144, with an average of two new breweries opening each day, so demand will surely continue for years to come.
Pelletized hops.
Beyond the Pacific Northwest, new hop farms are popping up in many states across the country, but it takes at least two to three years before they begin producing hops. Additionally, many of them are small farms (some of which pick their hops by hand), their yields are usually not as good as farms in the Northwest, and most do not have the ability to kiln and process the hops for year-round use. Thus, many of these farms only sell their hops to local breweries for fresh hop beers.
All of the recent acquisitions by AB-InBev and the like have some people concerned about the future of the hop market. Most of the recently purchased craft breweries, such as Ballast Point, produce long lineups of hop-forward beers, which means two things: Production and distribution of these beers will surely increase drastically in the near future, and more / larger hop contracts will be signed — both of which could lead to increased demand and an increase in prices.
Small breweries do not always have the capital to sign large hop contracts, and even if they do, it’s hard to predict demand for the beer.
Not long after opening, Wander Brewing experienced this, when an unexpectedly high demand for its Shoe Toss IPA depleted its supply of hops. To alleviate some of that IPA demand, it began brewing its On The Spot IPA series, which uses various non-contract hops that are available on the market.
When a brewer buys hops on the spot market, they have less control over quantity, availability and price, but Wander’s On The Spot series has been wildly popular, and it’s a great example of a brewery successfully adapting to the market.
A couple other strategies small brewers employ: When they contract too many hops, they’ll often trade hops with other breweries. And when developing recipes for hop-forward beers, they’ll often use a blend of many hops (something large breweries do as well). That way, if one variety runs out or becomes unavailable (due to lack of supply, disease, etc.), they can substitute in a similar variety without affecting the flavor profile of the beer.
As 2015 comes to a close, I am optimistic about the future of hops. There might be some growing pains, but I believe hop production will continue to rise to meet the demand of the rapidly growing number of breweries in America, especially if new breweries sign contracts early and often. Hop contracts enable growers and distribution partners to plan and plant accordingly, and they provide brewers with a consistent supply of hops.
