Hop vines in field Willie Vogt
HOP TO IT: The craft beer industry is boosting demand for hops across the Northwest. Top states for production: Oregon and Washington.

Craft beer demand boosts hop business

Oregon Department of Agriculture looks at one hot crop area built on the love of "liquid bread."

Recently, the Oregon Department of Agriculture produced a feature looking at the hop business. This perennial crop raised in complex trellises is a key ingredient for the more complex taste of a growing number of craft beers across the country.

Oregon and Washington rank first and second, respectively, in U.S. production of hops. The two states produce about 90% of the nation's hop production. And it's a growing market. In 2016 along, demand jumped 11%.

The department noted that statistics from the 2016 growing season back the notion that beer consumption is on the rise. Last year, more than 1,000 additional acres of hops were harvested, and the 7,765 acres is a 43% increase over what was harvested in 2014. Production also rose 16% in 2016 to nearly 12.4 million pounds. With a better price per pound, the department reports the value of product last year topped $65 million, nearly double the production value of the 2015 crop. Oregon hop production happens on slightly more than 30 family farms in the state.

A complicated crop to produce, hops need two growing seasons to produce a crop, so the 2016 increase in hops is a result of plantings in 2014 and 2015. According to a recent Wall Street Journal report, a challenge with that long growing season is betting on which type of hops to grow. Rising interest in Citra hops for what are called West Coast IPA-style beers has more growers planting different varieties of hops to meet market needs.

In the hops report, the department quoted Michelle Palacios, administrator of the Oregon Hop Commission, who noted the production peak of 2016 was "the response to the market demand that began more than two years ago, when Oregon growers planted hop acreage to meet the increasing demand for aroma-type hop varieties."

Overall acreage is up, Palacios said, but those aroma-type varieties are lower-yielding in general, thus bringing a higher average price per pound.

The Oregon hop industry hasn't always been so hot. The state had seen a six-year decline in acreage before the recent demand shift. While the state may see more acres come into production in 2017, the increase will be smaller than recorded last year. Most changes in production in the near future are expected to be in response to new and different hop varieties, as required by customers, than increases in overall production.

Demand and statistics
As for that demand, Theresa Yoshioka, Oregon Department of Agriculture trade manager, noted that Oregon is the No. 1 state for craft brewing and the top state for consuming craft beer per capita. "The craft beer demand and trend continues to grow across the nation and worldwide. With this growing demand for craft beer, there will be more demand for hops."

Here are a few statistics from the Oregon Brewers Guild that show how the craft brewing business continues to grow in Oregon alone:

• There are 230 brewing companies operating 261 facilities in the state, up from 73 in 2009. Among locations, 70 breweries are in Portland, 26 in Bend and 14 in Eugene.

• Oregon brewers craft about 1.7 million barrels of beer — twice as much as the amount produced in 2009. That's about 3.4 million kegs, or 470 million bottles of beer.

• Oregonians consume about 650,600 barrels of Oregon-produced beer, which is about half of what is produced in the state and 22% of all beer consumed in Oregon.

• Oregon leads the nation in the percentage of dollars spent on craft beer.

• Oregon breweries employ 8,500 full and part-time employees.

Source: Oregon Department of Agriculture

 

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