Letter to a Potential Hop Grower

In the various roles in which I’ve served in the hop industry, I often received messages from people who want to get into the biz.  I love the hop industry.  It’s a fun and challenging place to be, but the advice I give always seems to be roughly the same, it’s not an easy game and there are lots of barriers to entry.  Below is a reply to a DM I received earlier this week from a guy in Georgia, where craft beer is booming now.  If you’re also contemplating growing hops, I hope this will help.  The advice might seem discouraging.  That’s certainly not my intention.  It’s also not intended to be an all-inclusive list of what you’ll need to do or even of all the potential pitfalls.  The message just hits the highlights, but it’s a start.

“Problems you may run into trying to grow hops in Georgia would be short day length in the summer, humidity causing both downy and powdery mildew and some pests that may not be prevalent in the Pacific Northwest.  None of those are insurmountable obstacles, but they are all challenges to be aware of.  You should consider buying a Wolf picking machine from Europe.  The one you’ll need depends on how many acres you plan to harvest.  You’ll also need a dryer, also likely from Europe unless you build your own kiln there, which is very doable.  If you have access to natural gas, it’ll be more efficient.  If not, propane would be the way to go. You don’t want to use diesel. Some say it leaves an off taste in the hops.  You’ll need a baler or pellet mill to put them into a form that is more easily stored and delivered.  You’ll also need some cold storage for what you produce.  We’re building those now.  They’re not cheap.  If you have a pellet mill, cold storage will be easy to find.  If you’re baling your hops, the insurance will be a bit more expensive.  For all of that together, not including the land, for a small scale operation, if you’re crafty (no pun intended) you can probably get by at around a half million dollars.  You can delay some of the expenses until production gets closer.  Regarding production, you won’t get a crop you can bank on to sell until your 3rd year.  Then, if you’re going to sell them to brewers, you’ll need a sales team, some inventory tracking software and somebody to keep your books straight so you don’t short any of your customers ever. 

I’m not trying to frighten you off or anything like that.  There is definitely a need for more hops and hops from Georgia would be nice for Georgia’s brewers.  You’d definitely satisfy a niche market for which you could probably get a little more money.  It’s just good for you to know the whole picture going into this instead of just looking at the prices and thinking you can make that work.  I’m not suggesting you’re doing that, but I’ve spoken with plenty of people who did see high prices and thought they could make a killing only to realize 3-5 years down the road it was lot more work than they originally thought and the money doesn’t really pay for it unless you’re at scale.  All that said, passion is a powerful motivator.  If you’re really wanting to do it, go for it.  Please let me know if I can be of any help along the way.”  

I obviously didn’t get into any of the economics of the business, but the farm would most likely be small and even with higher prices for fresh and local product would not break-even for several years after the first crop due to the high costs to get started.  There’s definitely a market for local hops and for fresh hops, which command a much higher price due to the complexity of delivering a very perishable product. That would remove the need for a pellet mill and maybe for cold storage, but it complicates things in many other ways.  Growing hops is definitely a labor of love and the people who do it deserve to be well compensated … you won’t hear many hop merchants say that openly.  It’s true though.  Hoppin’ ain’t easy.  

I’d love to hear your thoughts in the comments below if you’re considering becoming a hop grower in the near future.  

6 thoughts on “Letter to a Potential Hop Grower

  1. Steven Sorrell says:

    I've wanted to set a farm up. Looked at it in Maryland and Virginia (allow farm breweries) and in Missouri (family owns a lot of farm land) but am still making sure i know all the hurdles. I think there may be ways to delay some of the cost mentioned here depending on how crafty you can be.

    Also wonder how markets such as Lupulin Exchange could affect this. http://lupulinexchange.com

  2. Douglas MacKinnon says:

    David, Great question!! Actually, a majority of the hops in the Pacific Northwest are sold this way. Not all merchants produce their own hops. Some do, but most of the hops grown in Yakima are not produced by hop merchants … even the merchants that claim to be "grower owned" buy their hops from farms. There's nothing wrong with that in and of itself. Growing and trading hops are two very different businesses. Most merchants buy from hop growers with whom they have good working relationships. They then process, package, store and sell hop products like pellets, extracts and other things to breweries. On the opposite side of the coin, some growers like to play in the merchant space selling direct to breweries as well. That has become more popular over the past 5-10 years, but only in large quantities as most U.S. hop farms are too big to concern themselves with sending out small quantities of hops to brewery customers. They're just not set up for that. Thanks for the great question!

  3. David Espinda says:

    Are there any grower to processor relationships out there currently? Similar to California wine industry where many small vineyards produxe grapes but do not produce juice/wine…they sell them to the larger wineries.

  4. Douglas MacKinnon says:

    Thanks Sean! Glad you agree with the article given your experience. It's definitely not as easy at it looks.

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