Hop production has exploded in recent years in North America as producers assumed local breweries would value their product – but continuous difficult market situations have Ontario growers sitting on product they can’t sell.
The explosion led to the highest acreage numbers of hops seen since “1996(ish),” says Evan Elford, new crop development specialist with OMAFRA.
“It is a much different market now than even five years ago with much higher acreage and volumes of hops available compared to when many Ontario growers started into production over the last 10 years.”
Why it matters: Hops were seen as a new value-added crop with good potential for Ontario growers.
Hop production continuously increased up to 2015.
“Up until about 2015 growers (and breweries) were looking for local hops. They saw local hops as a novelty. In the late 2000s a lot of our craft brewers couldn’t get the hops that they needed and so that’s why a lot of our local growers actually started into the business.”
Craft breweries were unable to get the hops required due to international production shortfalls from 2003 to 2007. This, combined with a warehouse fire in the largest hop growing region in the world, Yakima, in 2006 resulted in the largest hop shortage from 2007 to 2008.
As well, during this time the craft beer sector was increasing, along with the demand for “buy local”, all of which was positive for producers.
As larger growing regions recovered from the production shortfalls of the mid 2000s, hops volume has increased since 2015.
At the same time, proprietary varieties of hops, those giving a fruitier note to popular IPA beers, began to increase in acreage and use. These varieties are more difficult to grow in Ontario.
“These two changes in markets/market cycles are now starting to really impact our small-scale hop growers. The market many of our growers started in has quickly become very different than anything they’ve experienced in their relatively short time of producing hops,” says Elford.
As well, ‘local hops’ was wearing off as a sales pitch.
Many growers are now sitting on at least two years worth of inventory and have to sell old hops at discount rates.
“It’s definitely splitting the market for our growers because we don’t have the access to those proprietary varieties. Its not just Ontario experiencing this issue, it is a market change.”
Some farmers in Canada have decided to exit the industry.
“At the beginning there was a big allure,” said Brandon Bickle, an Ontario grower who has decided to leave the industry after farming for seven seasons at Valley Hops. He was quoted in a recent article in Modern Farmer.
Unfortunately growing hops takes a large capital investment and the plants take three years to develop a crop, adding to financial strain.
The Modern Farmer article says some growers are selling varieties for just $5 but producers require sales at $17 to $20 per pound to make a profit.
Some growers have been pushing for provincial governments to implement incentives for breweries who use local ingredients.
Elford says Ontario growers have greatly improved their hop quality, and hopes that breweries will begin to recognize them.
“Some of the growers are growing some of the best hops and pelletizing some of the best hops that I’ve seen on the market, and that’s comparing internationally.
“There are multiple factors that are involved as to why we have product sitting right now. It’s definitely a learning curve. A lot of the industry is still so new that we are still just gaining the growing pains I think within the industry as our local growers adopt to these market changes,” says Elford.