Has Anyone Started A Small Hop Farm And Actually Started Selling To Breweries?

I follow the hop growing forum pretty regularly but I don't see a lot of info on whether or not people are becoming successful enough to start selling production to local breweries/hbs. I am interested to hear about any/all of the questions below.

Questions are:

1) How many rhizomes did you start out with?
2) Have you started selling to brewers or elsewhere?
3) How many years until you first started selling hops?
4) If you did start selling, how many plants/lbs of hops did it take before you had enough to sell to someone?
5) Are you profitable yet???

Jeff...is this you? Assuming it is, you probably know my answers but I'll post here to get the ball rolling.

1.) 350-ish if I remember correctly. Maybe a couple hundred more. That seems like a lifetime ago.

2.) You bet.

3.) Technically year 2 for us...year 1 for any of our growers that actually produce something worth selling. We kept our year 1 crop to experiment on ourselves.

4.) Depending on the final form, it can be a fairly small number. Wet hop numbers for a specialty batch depends on the size of their brew kettle. Dry, whole cone will also sell in small batches if they are going to use them for dry hopping or other special purpose where alpha isn't as important. Once you are talking pelletized or whole cone where the brewer is going to use them as the sole hop for a significant number of runs, it will be 10's of pounds to over a hundred. Assuming your alpha is different than their other suppliers, they don't like taking the time to re-calculate alpha for every batch they brew.

That said, I would like to hear others answers as we skipped most of the whole cone options and jumped straight to pellets. I know others experiences have been different.

5.) Ha! It depends on who you ask...my wife or the accountant. Obviously, we've branched out into so many other areas, I'm not sure of the financials on just the hop yard.

Nope not Jeff lol, I am John, fairly new to HomeBrewTalk so I don think anyone really knows me too well yet. I have some second year hops growing pretty well (only 5) and really love it. I am entertaining the idea of starting a small farm (in NY most likely), but I am more on the realistic side and am not one to jump into anything unless I have done an enormous amount of research first Although I have read just about every single piece of written word about growing hops, the best info still comes from people like you who have done it before and I hope this forum can draw out some realistic numbers for me and anyone else who is curious

Thanks Dan!

Well, by the end of this year we will be able to provide some numbers as we have 150 on their second year. The real numbers will come next year as we will have 3rd year hops and the majority of what we planted this year will be in their 2nd year, with some going into their 3rd year due to being in pots last year.

I'll stay subscribed to this thread and update with any numbers I can supply.

jglazer said:

Nope not Jeff lol, I am John,

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OK...then you wouldn't know me. Here in Madison there is guy named Jeff that does a lot of legal work for small breweries, farm co-ops and the like. Your questions are similar to ones he would ask.

Anyway, since you don't know, I'm part of Gorst Valley Hops out of Mazomanie, WI. We started like most but it was long enough ago that we were the only kids on the block. So to get any traction, we had to ramp up our numbers quickly and provide pelletized product that WI/Midwest brewers demand. So we went from 1/3 acre of our own to starting a partnership with 40+ other hop growers in the midwest so we could feed a pelletizer we bought. So we grew from our 1/3rd acre to well over 50 acres between us and our associates.

So the reason I can't answer #5 is because we have expanded to include a processing center, harvester manufacturing, dryer manufacturing, laboratory testing, etc. plus purchase a lot more land on our own.

That said, I can give you an answer. You are probably looking at 3-5 years to break even, if you do everything right. Figure $10k to put an acre in (yes you can skimp in some areas but other things tend to eat up the savings), 2 to 5k per year to grow. Then figure in your harvesting costs (either 750 labor hours or a mechanical harvester), a well if you need one, dryer, and then any processing costs (lab work, pelletizing if needed, packaging). But then if some of your poles snap off in a freak storm (happened), you have a looky-loo tourist run into your trellis (happened), you discover your artesian well wasn't sufficient and you have to dig a new one (happened) or you have a 500 year drought/heat wave that drops production to 20% of expected (last year)...well then add a year or two to that estimate.

Point is, this is NOT a get rich quick scheme. Nor is it an easy way to get rich. Hell, I'm not sure you could ever get "rich" at it. You really need to do it because you want to and you are passionate about it, sort of like homebrewing.

HBers:
Just a WHOMA: Why not start a file which contains contact info and varieties of hops grown by, well, hop growers? A file similar to the bottle-trading file you have for beer and wine bottles. That way, we wouldn't have to depend on far-off growers, and, we could grow varieties which are not commercially profitable, but still of interest to, well, anyone interested. Growers in even a small area could grow all hundred varieties, and have a thriving local trade. A hop farmers mkt.

jglazer said:

I follow the hop growing forum pretty regularly but I don't see a lot of info on whether or not people are becoming successful enough to start selling production to local breweries/hbs. I am interested to hear about any/all of the questions below.

Questions are:

1) How many rhizomes did you start out with?
2) Have you started selling to brewers or elsewhere?
3) How many years until you first started selling hops?
4) If you did start selling, how many plants/lbs of hops did it take before you had enough to sell to someone?
5) Are you profitable yet???

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1) started with roughly 1800 plants last year. So only second year
2) brewery relationships started last year as well. So ill have buyers before a product ever goes to them
3)hoping this year!
4)keep u posted
5)hell no!!! Like dan said. Hoping by the end of next year to start paying off and take a paycheck!

Dan hit it on the head. Def not a get rich quick deal. U have to want to dedicate time. And hit as many different ave. as possible. Cant be lazy. And ill def have a full time job on top of this for the foreseeable future! Between this and possibly tapping into a small biodiesel plant could have a pretty interesting future!

Cheers
Dan

My situation is unique and after speaking with a number of other hop farmers I realize how thankful I am.

I am a failed cranberry grower....it still stings a little but its true. I had just over 2 acres of my own and an acre of lease bog. The plan was to have a little for retirement when I leave my regular job. My bog was built by a less than honest contractor and it never held water, unable to flood is a bad thing in cranberries.

A neighbor suggested hops and I met with a local brewer ready to go pro. We came to an agreement and I am just finishing a nano on my property. I started with 35 crowns of varieties picked by him. So I had a market in place when I planted. Our first few months of sales had my Cascade in the IPA. My plan is to expand my 35 raised beds to 70 this year, then 105, then 140 total. I also grow sweet pumpkins and some berries.

The last couple of years I attended the Vermont Hop Conference. There I heard some horror stories from growers who had sunk the family savings into this venture, only to be turned away at local breweries. For that I am thankful for having a brewers input and a ready market.

The business plan of his works. Sales have been great and we are in the final phases of a 3 bbl system. So the bottom line is I started real small, selling to one guy (giving some away too) and it sure looks like it will work. My circumstances are exceptional but I think it could be duplicated.

FrugalEndeavorsFarm said:

The last couple of years I attended the Vermont Hop Conference. There I heard some horror stories from growers who had sunk the family savings into this venture, only to be turned away at local breweries.

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Could you expand on this part? Why are the failing? From your statement, its sounds like they are producing hops, just not getting then sold. Are the brewer's demanding alpha/beta/oil/etc. testing that they can't provide? Are the brewer's demanding pellets or plugs? Is the price too high?

I ask because this is an important aspect that is often overlooked. 5 years ago, brewer's would purchase whatever they could get their hands on just to have the "local" label on their beer. I'm finding that isn't always the case any more. Some demand testing be performed. Some demand certain quality standards be met. Some demand it in one form or another and packaged in their preferred method. Some will walk away if the price isn't the current spot market price.

Our philosophy is there is probably no way we can ever compete on price...so we have to remove all the other barriers and provide a better product. Its not easy and we don't make every sale because of the price issue. So we know there is a limit to our growth, but we're just not sure what that limit is because we are far from producing enough to keep even our current customers orders filled.

Then there's the "organic" issue. I'm not looking to get into the philosophical debate of what is better. I'm just curious how many of those failed growers were trying to go organic? In our experiments, at best an organic hop plant could only produce 1/2 of what other plants produced. Yet even with the change in laws, we are only seeing a 10% to 20% premium for organic hops. Its hard to make an economic justification for organic.

The general consensus seems to be the failure to establish a relationship with a brewer or brewery. Several people, including a speaker from Canada, had gone into the project rather blind I think.

Failure to have testing done was a specific issue, but that ties in to being an unknown variable in a brewers established recipe. The gentleman from Canada told us he travelled in a 50 mile radius of his farm to a number of breweries and was turned away. He seemed to feel that the brewers felt he was an unknown and unproven, which he was.

Part of the reason I posted a response was to encourage the grower/brewer relationship. I lucked out, truly. I planted one variety on my own, Zeus, cause I liked its qualities. My brewer doesn't use it, nor is it on his list of things to do as we get underway. But he picked 5 he uses, so thats what I planted. I would suspect with some shoe leather burned, some favors called in, and some luck a new grower could approach a brewer and offer to grow what he/she wanted and maybe have a market started.

Vermont brewers also spoke at the conference expressing concerns on handling procedures. People who had the opportunity to get some face time dropped the ball with handling.

I never really questioned the organic or not issue. I recall one or two were going organic on farms already using those practices. Peak Organic Brewing in Maine did reach out to the event organizers hoping to establish relatioships with organic growers. Not being one I never followed the story to see how it worked out.

http://www.7dvt.com/2011vermont-hops
Vermont is quite interesting because we have one of the highest brewery per capita of any state in the country. The article is quite interesting because they ask some well established micro brews who would love to have local hops (local is a trendy word in Vermont) but don't trust the quality. Having a hops farm is a beer drinkers dream but from what I can read, its just that... a dream. I'm keeping my day job instead of hops farming.

Mark from Bobcat spoke at the 2012 conference about handling, he also served each of the 200 plus attendees 6 samples of beer. The beer samples contained hopping mistakes (4 mistakes/2 correct beers) to show growers what mishandling hops can lead to in the long run.

To the hop farmers:

What is your industry saying relative to the long-term market potential? Is anyone talking about it? Seems like NY is the place to be for hop farms...what is Cornell Ag Extension predicting? Other NorthEast Ag Extension agencies?

On this forum there seems like ALOT of people are looking at or have recently started hop farms. Is there any idea on the number of new farms started in the past few years, and the projected number to be started?

Another thing I was wondering is the varieties you are growing and what everybody else who is jumping into the game is growing. I know alot of the most popular hop varieties (Citra, Simcoe, Amarillo) are proprietary and you don't have those...are you guys all growing the same hop varieties?

I guess you can see where I'm going here. I'm thinking hop growing may be headed toward a huge bust in a few years (like what happens to alot of unsubsidized Agriculture markets). There is alot of people getting into hop farming, they are all growing the same non-proprietary strains, and its my impression that current supply is able to meet demand (short-term shortages not withstanding).

I do understand that the craft beer market is growing which would mean an increased demand for hops, but is it going to drive up hops to the point where even the small hop farms are going to be able to unload their crops? Keep in mind the big boys in the NorthWest are probably expanding too....a cost/acre you guys can't touch....will they absorb any increase in demand or will outpace even what they can expand to handle?

In short...what are you guys seeing here?

Let me break this up and answer what I can...all very good questions that I would love to have the answer too.

broadbill said:

What is your industry saying relative to the long-term market potential? Is anyone talking about it? Seems like NY is the place to be for hop farms...what is Cornell Ag Extension predicting? Other NorthEast Ag Extension agencies?

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First who is "your industry". There are still big guys in the PNW claiming hops can't be grown outside of their state. That's complete B.S. There are way different obstacles in other areas so it can't be grown in the same fashion but I digress.

What's the potential? I'm going to speak to the Midwest/Great Lakes area since that's my home and market. Based on number of breweries in this area, we estimate it would take 2,000+ acres to satisfy the CRAFT brew market. (That neglects the Bud/Miller and their smaller labels.) That number is also based on # of crafts from 2 years ago which has obviously grown.

How many acres are in play right now? I would have to estimate 50 -100 acres in WI and maybe two to three times that if you include MI, MN, IL, IA and IN. How many of those acres are at full production (I mean 1,500 lbs dried or more)...maybe 10%. The rest are either too young or not properly managed.

Is NY the place to be? Well, I would take exception to that but I don't want to get into that debate. Right now, there are 3 major regions trying to take off. The original would probably be the Western Slopes of CO (talk to Glen...Hopfarmer on this forum), WI and the rest of the midwest was 2nd closely followed by NY and the New England Region. Of those three, NY has definitely had the most governmental/academic support. So from that standpoint, I guess that would be the place to be except I haven't seen as much buy in from the brewing community there as in WI and CO. We have no problem selling our entire crop and I believe CO is the same. I would love to hear from somebody in New England/New York that could speak to this aspect. Has there been any problem selling your entire crop?

On this forum there seems like ALOT of people are looking at or have recently started hop farms. Is there any idea on the number of new farms started in the past few years, and the projected number to be started?

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Nope...beyond those three previously mentioned regions, there are efforts to put in farms in Vancuver, North Carolina, San Diego, Montana...the list is endless. The big grower associations in the PNW don't want to track or even acknowledge most of these groups/growers. With good reason because so many sprout up and then go away that they would waste their resources trying to track it all. The USDA needs to see a significant amount of production before they even start taking statistics.

Another thing I was wondering is the varieties you are growing and what everybody else who is jumping into the game is growing. I know alot of the most popular hop varieties (Citra, Simcoe, Amarillo) are proprietary and you don't have those...are you guys all growing the same hop varieties?

I guess you can see where I'm going here. I'm thinking hop growing may be headed toward a huge bust in a few years (like what happens to alot of unsubsidized Agriculture markets). There is alot of people getting into hop farming, they are all growing the same non-proprietary strains, and its my impression that current supply is able to meet demand (short-term shortages not withstanding).

I do understand that the craft beer market is growing which would mean an increased demand for hops, but is it going to drive up hops to the point where even the small hop farms are going to be able to unload their crops? Keep in mind the big boys in the NorthWest are probably expanding too....a cost/acre you guys can't touch....will they absorb any increase in demand or will outpace even what they can expand to handle?

In short...what are you guys seeing here?

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As I previously mentioned, there is plenty of "room" in the market for new hop growers. The problem is the previously mentioned consistency and quality. Most brewers brew beer...they also do sanitation, handle waste water, are an accountant, are the sales/marketing team, run human resources, etc. They don't have time to check every batch of hops from a different grower for quality, alphas, betas...and then adjust their recipes accordingly. That's the beauty of good co-op or, in our case, business relationship were everyone in the group that hits certain quality markers gets blended together so a single variety can be bought in bulk. Now a brewer can buy 1,000 lbs of cascade, 500 lb of Goldings, and 200 lb of Perle instead of 5 lb here and 3 lb there. Its my opinion that an individual farm of only an acre or two cannot survive UNLESS they are going to sole source to a single brewer. For me, that's just too risky. Now I'm not just betting the farm on myself but also on this brewer.

Could the big guys undercut us all and drive us out of business? Yes they could in a heartbeat...IF price is the only thing brewers cared about. Most craft brewers are selling to a local market and want to support other local businesses as much as possible. So if you provide a consistent product that is the same or better than what is being delivered by the PNW, 50% or more brewers will not mind paying a premium price.

Is there going to be a "huge bust" in the small scale, non-PNW hop growers? Yep, there all ready was one but its not for the reasons you mention.

The first wave of new hop growers was in the 2008 season. These were predominately the people who saw the 2007 "shortage" and subsequent price spike. They were all going to get rich. Many put fields in, realized it was way too much work and pulled out by 2010/2011. Those that survived are the ones with more realistic attitudes.

This second wave seems to be dominated by the enthusiastic hobby grower. Maybe they want to grow hops because they want something unique. Many want to get into the "beer business" and be able to stand behind a booth at their favorite beer festival. Some are looking for something to do in retirement. There is nothing wrong with any of these reasons and I will predict that in 5 years, many of these will still be around in one form or another. The ones that aren't, again, are the ones who didn't realize the labor, time and investment it took. They will bust out before they ever get to the point of having a viable field. A few others will do a fine job of growing but won't grasp the need for proper drying, packaging, testing or some other step that their local brewers look for when buying hops.

Some give up when they get bitter because no one is buying their hops. I had one grower tell me, "Its not fair. Why can't the brewer meet me half way? I'll grow and pick and they can just take it like that instead of making me go through all that drying crap." My only answer was, "They are the customer. He who holds the gold makes the rules." When you can't meet the brewer's expectation for a product, you won't get the sale. Without the sale, either this is a hobby that you have to fund out of your own pocket or you fold.

[/manifesto]

"What is your industry saying relative to the long-term market potential?"

The Mass DAR states that the craft beer industry here in Taxachusetts can use 100 acres of hops. They have started a craft beer study to evaluate the potential, I suspect the results will be available this year.

"I do understand that the craft beer market is growing which would mean an increased demand for hops, but is it going to drive up hops to the point where even the small hop farms are going to be able to unload their crops?"

Again my background is in cranberries, when everyone built bogs in the 90's due to super high prices the market was full. Some of those bogs now have a house on them, including mine.


"Keep in mind the big boys in the NorthWest are probably expanding too....a cost/acre you guys can't touch...."

Once again we here in Mass could not keep up with cranberry expansion rates out west. At its peak you could get $85.00 per barrel (100 lbs) for wet harvested fruit. My uncle just got his last check for a total of $22.50 a barrel, they promised $35 but recanted and refuse to send a final check.


Given the number of cranberry growers that are approaching me there is a lot of interest in hops in my area. I am super small but the only one so I get lots of questions. There seems to be a local interest in the alternative healing market too, that may help sustain some smaller farms who keep diverse and don't rely exclusively on beer.

Hope the OP is ok with where this post has gone.....FEF

FrugalEndeavorsFarm said:

I am super small but the only one so I get lots of questions.

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Be careful with this one. This is the reason we started holding workshops. At one point, we realized that between 4 of us we were spending over 30 hours a week answering questions. That was the time we needed to weed, water and do other things.

Everyone honestly starts with just 1 question but that leads to another and another and another...After awhile, our policy was you can only ask questions while pulling weeds or moving a shovel. At least that way we got a little work done.

I love this, thanks for the information guys

Well harvest just finished here about 10 days ago !!! Its all baled !!! Waiting for a truck. If you are going to do this have deep pockets !! Also get ready to be sore at the end of the season

End of the season? We've only got half of the hops in the freezer, still have to pelletize it all and I'm plenty sore.