E-Malt.com News article: USA, MI: Shade falls on Michigan hops industry

Just a few short years ago, hops were the hot new crop, powered by ideal growing conditions and demand from the explosive growth of the craft beer industry, the Traverse City Ticker reported on October 31.

Yes, the beer craze has continued unabated; Emily Bennett, who visited every brewery in the state in 2017, lists some 372 Michigan breweries at MittenBeerGirl.com, with another 64 pending. A recent Forbes feature said Michigan ranks behind only California, Washington, and New York in its number of breweries.

But that doesn’t mean the Michigan hops business – not long ago considered virtually a “sure thing” – is booming.

Mike Moran, sales and marketing manager for MI Local Hops in Williamsburg, says it’s all about supply and demand. “Overall, there are public (hops). That’s the majority of varieties grown in Michigan,” he says. “Prices are going down. Proprietary hops prices are going up.”

“It’s spotty,” agrees Brian Tennis. The Omena-based head of the Michigan Hop Alliance says a number of growers have struggled, and some have gone out of business in the past two years. “I think a lot of them planted the wrong variety.”

That’s in part because it’s hard to choose and plant just the right varieties. Like corn, apples, tomatoes and other crops, each variety of hop is unique. “They have different bitter and aromatic characteristics. And there’s the terroir effect,” says Tennis.

Many of the more desirable ones are exclusive to certain growers, mostly out west. “The stuff that’s hot is proprietary. We can’t get the rights to grow it,” says Tennis.

He says another reason for the downturn is the fact that some breweries that signed contracts with growers to guarantee a price later discovered they had more hops than they could use. So they also became sellers, further adding to the supply. “They were scared into taking on long-term contracts to make sure they had hops. To get the proprietary hops they had to take public as well.”

That led to a glut of the public varieties. “If it’s easy to find on the spot market, there’s no demand. If it’s hard to find, there’s lots of demand,” says Tennis.

So what’s been the actual dollar effect on the hops market? “In Michigan, we grow Crystal, Chinook, Cascade and Centennial,” says Moran. “When we started, we were getting $11 to $12 per pound for Cascade. Now it’s $6 per pound.”

According to Craft Brewing Business, the Michigan hop industry grew 153 percent in the last two years, but will stabilize at about 800 acres. A hundred years ago, Michigan was at the center of the hop-growing universe, along with New York and Wisconsin. But an infestation of the hop louse and the spread of downy mildew devastated the industry, and production moved west to Washington, Oregon and Idaho.

A century later, the industry has been on the rise again. Michigan’s location, straddling the 45th parallel, and the region’s access to plenty of water make it ideal for growing hops.

But the challenge of producing the most sought-after varieties and the industry players themselves have frustrated many. Moran says the competitive nature of hops farming stands in contrast to the atmosphere around craft brewing. “Craft beer is all about collaboration. Hops hasn’t been that way, but we’ve got to do that if we’re going to succeed.”



01 November, 2018