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CASTLE MALTING NEWS in partnership with
04 August, 2022

Hops news USA: Approximately 26 additional states grew hops for crop 2021 in the US

For crop 2021 the number of hop farms in the Pacific Northwest (PNW) decreased by one, reducing the total number of growers to 69. Larger farms that have multiple corporate entities are counted as one farming unit, the Barth-Haas Group said in their latest report.

The average farm size increased slightly to 357 ha, with Washington leading at 479 ha per farm, followed by Idaho and Oregon at 392 ha and 136 ha, respectively. With the further acreage expansion for crop 2021, most PNW farms were near the capacity levels of their existing harvesting infrastructure.

It is estimated that approximately 26 additional states grew hops for crop 2021. With a few exceptions, most hop farms outside the PNW region are of much smaller scale compared with the large established farms in the PNW.

Following a 4 % acreage expansion in 2020, crop 2021 saw a further increase of 4 % (903 ha), marking the 10th consecutive year of acreage expansion in the US and again setting another all-time acreage record. The total acreage strung for harvest in crop year 2021 was 24,635 ha for the
PNW region. The trend toward aroma varieties continued, increasing from 76 % to 78 % as a share of total PNW acreage, while the bitter category dropped to 22 %. Acreage of proprietary varieties rose slightly to 67 %, compared with 33 % for public varieties. Proprietary varieties continue to be contracted with growers on a full-production basis rather than for specific volumes, which eliminates the possibility of spot hops.

All three PNW states increased acreage by a similar percentage for crop 2020. Washington remains the dominant producing state at 17,719 ha (72 % PNW share) followed by Idaho at 3,923 ha (16 %) and Oregon at 2,993 ha (12 %).

Beyond the 3 PNW states, it is estimated that another 26 states grew approximately 561 ha of hops for crop 2021, down 44 % from the prior year. As a result, the estimated acreage in the non-PNW states has dropped to about 2.5 % of the total US acreage.

The top 5 varieties in the US accounted for over half of the US acreage at 13,095 ha collectively (53 %). Citra® added 398 ha (9 %) to maintain its place at the top of the US acreage list for a fourth consecutive year with a share of nearly 20 % of all PNW acres. Mosaic® passed CTZ to move into second place with an increase of 373 ha (17 %), while CTZ dropped to third with a reduction of 290 ha (11 %) as activity in the US alpha market remained slow. The recent
slide of Cascade appears to have ended with an increase of 117 ha (7 %) for crop 2021, which moved it slightly ahead of Simcoe® and into fourth place. Acreage of fifth-placed Simcoe® has been relatively stable in recent years and was again almost flat for 2021.

Just outside the top 5, Centennial continued its dramatic downward trend with a reduction of 254 ha (21 %). Total acreage of this variety thus halved within the space of only 4 years. Other varieties with notable increases for crop 2021 include Strata® (+275 ha / 127 %), Talus® (+161 ha / 258 %), Tahoma (+121 ha / 169 %) and Cashmere (106 ha / 46 %). Within the bitter category, in addition to the drop in CTZ acreage, Nugget shed 103 ha (29 %) as it continued to fall out of favor. Only minor changes were seen in other varieties within the bitter category.

Forward contract activity with growers commenced shortly after the crop 2020 harvest concluded, with most of the activity occurring over the months of October 2020 through January 2021. With the COVID-19 Delta variant subsiding by late 2020, the forward market outlook generally was beginning to improve, leading to further acreage increases for crop 2021. Contract terms varied from one-year to multi-year purchases typically consisting of 2021 to 2023 crops, with a few deals exceeding 3 years. A good portion of purchases was for bitter varieties including CTZ, Pahto® and Eureka®, with most of the volumes coming from existing acreages. New plantings of aroma
varieties were also booked during this timeframe led by Citra®, Mosaic® and Strata®, with smaller acreages booked for Cascade, Cashmere, Tahoma, and a few others. The grower market simmered after the early winter activity and remained relatively inactive until the crop 2021 harvest.

As reported by Hop Growers of America (HGA), US hop acreage outside the PNW region dropped by an estimated 44 % from the prior year. Hops from the non-PNW region are more prevalently sold into smaller, local markets which are heavily weighted toward craft breweries with on-premise distribution models. This segment of the brewing industry was hit hard by the COVID pandemic over the past two years, leading to a drop in demand for a large share of the non-PNW hop production. Of the 2.5 % share of total US acreage represented by the non-PNW states,
approximately 63 % of those acres collectively come from Michigan, New York and Montana, while the other 37 % of non-PNW acres are spread over 23 additional states that have relatively small acreages.

While the non-PNW growing regions did not experience the historic heat dome seen in the PNW, the other states also had their share of challenging growing conditions this season. Notably Michigan, the fourth-largest producing state, experienced a growing season hampered by several
extended wet spells with above-normal precipitation, contributing to increased mildew and other fungal issues which greatly reduced yields. HGA estimates that a total crop of 408.2 mt was produced in the 26 states beyond the PNW region, a drop of 10 % from the prior year. This volume represents slightly less than 1 % of the total US crop.

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