As the old saying goes, “The more things change the more they stay the same.” Now is the time when growers are making their plans for 2017. Do you remember that shortage that didn’t happen even though hop yields in the U.S. were 5 million pounds below average in 2016? You would think that might affect the plans for future expansion. For some reason, American hop growers are planning to expand.
If the current word on the street is true, American hop growers are planning to plant quite a few more acres in 2017. Some will plant a little extra to safely fill the contracts they have. Others will plant to produce a few alpha hops without a contract to get ahead of a price increase that might appear. Still others will plant a couple fields more hops and sell them for less because they want to get ahead of the market if it collapses. Others still will plant because they need to maximize production at their facilities and want to lower their fixed costs. I hope, through my month long January blog-a-thon, to bring some of the more important issues to light and hopefully stop growers from making a huge mistake. Planting more acres will ruin the market for years to come.
For a bunch of guys (and a few girls) who share a common business and benefit from the same things, hop growers certainly don’t act like they have anything in common. Their reluctance to cooperate is their biggest weakness. The fact that they are so easily divided makes them their own worst enemy. They are fiercely independent. To make matters worse, they have been forced together in a tiny valley. It’s not unlike holiday get-togethers with the whole family. There’s always some tension in the room even though (in theory) those are the people you are supposed to care about the most. For some of us, those memories are still fresh. If growers don’t learn to read the signals the market is sending, act responsibly and act together, there will be a lot fewer growers to gather around the table in the future.