Frequently Asked Questions when Starting Up a Hop Farm in New York
The following is some information that I have put together for people interested in getting started in hops. This information is a general primer to answer commonly asked questions. This is an exciting time for the industry with excellent potential for marketing to over 400 microbreweries around the state, with more applications pending. The NY Farm Brewery legislation creates new opportunities for on the farm brewing and sales. This legislation went into effect in January 2013, and you can contact Stefan Fleming at the Empire State Development Corp to get info on obtaining a Farm Brewery License at 585 399-7068 or Stefan.email@example.com. There are about 180 new farm breweries in NY as of January, 2018, however their production is only about 70,000 barrels of the 1 million barrels produced by craft brewers in NY.
New York historically had a very important hop industry about one hundred years ago. In 1880, New York produced 21 million pounds of dried hops, the majority of the US crop, which sold upwards of $1.00/pound. What happened, and why can we grow them again now? Disease pressure from downy mildew and powdery mildew, as well as aphids and spider mites made production much more difficult and risky. The industry started moving to the Midwest, eventually reaching the Pacific Northwest, in response to this disease pressure. Then along came prohibition, and the price of hops went from a high of $1 per pound to just 5 cents per pound almost overnight, and most of the hops in NY were pulled out of the ground.
There are several reasons why we can grow hops commercially again in New York. The industry in the Northwest has funded strong plant breeding and IPM research for many decades, and a good deal of effort has gone into developing new varieties with disease resistance. These varieties are doing well in NY and offer the best potential. Secondly, pest management options, both chemical and cultural, have come a long way in the last hundred years. These advances make commercial hop production viable once again in New York State.
Finances and Costs
What’s the minimum acreage for a farm to make enough on hops to have a livable income?
If you are doing a good job of it, 10 to 15 acres should provide a good income. It doesn’t sound like a lot of land under cultivation, but it is can be a lot of work and about $12-$15,000 per acre investment to get started. (see below) Currently, there is no one in New York with more than 40 acres of producing hops but I do expect that to change in the future.
What returns can be expected and how many years does it take to get a return?
There is great potential now for growers in NY. Local prices are all over the board, anywhere from $8-$14 per pound for dried, pelleted, hops, with an average yield of 800-1500 pound per acre if you are doing an excellent job. Some growers have obtained yields over 1,500 pounds per acre. Brewers currently pay from $4-10 per pound for hops grown on the West coast or from Europe, varying greatly on the amount they purchase, the variety, and market demand. Aroma hops in particular are in high demand by craft brewers, and predictions are that about 12,000 new acres of aroma hops needs to be planted over between 2015 and 2020 in order to meet this demand. Much of this has been planted out, and the market has softened somewhat. It is important to keep market prices in mind when developing a business plan, as brewers are conscious of their contracted prices for hops, and although most are willing to pay some premium, prices need to be realistic. Also, quality is more important than where they were grown, so “local” will not make up for poor quality hops.
The first year in production you may get a few hops, with a partial crop the second season, and a full crop the third and fourth years. Expenses are variable, but most growers believe they need to have gross sales of more than $6-8,000 per acre to break even because of initial investment, equipment, harvesting and processing costs.
What are the fixed costs to start up and what are the variable costs for ongoing production?
It costs about $12-15,000 per acre to get started including labor, plants, trellises, irrigation, and equipment. Growers are looking at the possibility of sharing some things, such as harvesters, kilns, and pelletizing and packaging machines. USAHops.org has an excellent publication on the cost of hop production. Go to their website and look under resources for 5 acre, 10 acre, or 20 acre detailed spreadsheets.
What are the costs, such as harvesting machines, etc.?
Harvesting is one of the main costs in producing hops. Hand picking is not feasible for anything more than an acre or so. A stationary Wolf 140 or 170 harvesters will cost in the range of $30-35,000, but is not easy to find in the US so shipping is involved from Europe. The Northeast Hop Alliance has one located at Morrisville College that is available for members to use. There are 15 more of these privately owned around the state. Keep in mind that the harvester you use needs to be within an hour of your farm, because of transportation time and costs. Growers are developing their own small-scale machines and several types may be available soon. For instance, Larry Fisher of Foothill Hops has built his own and will be sharing the plans. There are also plans from UVM in Burlington, VT for a harvester they designed and built with funds from SARE, as well as for a small-scale kiln and baler.
What other equipment is needed to grow hops?
Additional equipment includes a small tractor, trailer, weed sprayer, and crop sprayer like what is used in vineyard or orchard, truck, drying equipment, possible pelleter, a cooler, and a building for storage and drying.
Growers should plan on drying their own hops, but there are 3 pelleting companies in NY that will pellet and package; Northern Eagle Hop Processing in Oneonta, Foothill Hops in Munnsville, and Pedersen’s Farm in Seneca Castle. Others may have opened since this update, and can be found listed in newsletters and on the northeasthopalliance.org website.
Marketing your hops
What is the demand for hops in New York State to local brewers and in the future?
Hops are easy to ship once dried, however the demand right now is from micro-brewers and local is “in”. The growth was slow at first, because the brewers want to be sure that they can get a consistent product, both in quantity, availability and quality. As the number of acres increases, the demand will also increase. Brewers like the quality that they are getting from local producers! The demographics of the consumers of these products are in their 20s and 30s and it seems unlikely that they will go back to more generic beers. This is a good indicator that there is plenty of room for longevity and growth in the craft beer industry. We estimate there is a need for at least an additional 400-500 acres of hops in New York to satisfy the domestic demand for hops. Craft brewing production in New York exceeds 1.5 million barrels a year now. Keep in mind that farm brewery production is less than 5% of that number, so you must be prepared to compete with West Coast hops to be successful.
Is it possible to be classified as an organic producer?
Yes, there are some growers going organic. It is more work and risky, I’d say and time will tell if brewers will be willing to pay a premium for organic hops. Eastern hops are already higher in price than west coast hops. That said, there is interest on the part of growers and brewers.
Is there a profitable online sales market?
I would say yes, but with a caveat. New York hops are going to be more expensive to produce, so many home brewers are looking to other regions still because they are less expensive. You would have to build interest in “local” or uniqueness on the part of home brewers in order to be successful.
It is very important that you select the area where you will be growing and begin the get the land prepared. It should be well drained, have access to water for irrigation, be flat or have a gentle slope, and have good air circulation as well as full sun. Those are the key ingredients to site selection. I would start by going to your Cornell Cooperative Extension office in your county and obtain copies of the soil maps of your farm. The USDA NRCS or the County Soil and Water District staff can tell you about the particular qualities of each of the soil types.
I would also obtain a soil test box there for Dairy-one/Agro-one and send it in with the “F” form filled out for hops establishment. This will tell us if you need lime or other minerals to be added before you plant. I also would suggest that you ask the Extension staff about establishing a cover crop this year to cut down on the weeds. Buckwheat followed by clover is a good choice. Will you be organic? What is growing in the field now? Grass, weeds, corn? Atrazine carryover can be harmful. You may want to kill off what is there with either tillage or cover crops or with glyphosate (Round- up) as perennial weeds and grasses will be a problem, and you want as little of those as possible before the hops go in.
Designing a Hops System
What is the system of growing plants that will produce the highest yield?
The highest yields are still with full size plants on high trellises 16-20 feet off the ground. About 900 plants per acre are planted about 3ft apart in rows 12 ft apart. There are a few different high trellis systems being tried out in the Northeast. Low trellis systems (10 ft with plastic deer netting) are being used out west, but require specialized ($350,000) over the row harvesters, unless you plan to hand pick in the field. It may also be more difficult to manage diseases in low trellis hops so I do not see this as a viable option at this time. Also there are very few varieties that lend themselves to dwarf production, which also means less diversity to offer a brewer.
What about irrigation?
Hops need at least an inch of water a week, more as the season progresses. Most growers are using drip with the emitters set at 18-24 inches apart. You need to know how many acres you want to put in, and determine if you have an adequate water source. You usually can water one block at a time for several hours and then shift to another. An acre can use 5-6,000 gals of water per day.
How are the plants harvested?
The plants grow up twine (coconut coir) which at harvest time is cut at top and bottom and brought to a barn to be hand-picked or trucked to someone with a harvester to machine picked. Baling twine will stretch, cause the plants to droop and break at the soil line and clog up a mechanical harvester especially the Wolf machines. Hand picking is not cost effective, taking about 1 person hour per mature plant to complete. We have 20 Wolf harvesters in New York and a number of smaller pickers manufactured in the state now. As acreage grows we may see more of these purchased or built. Mobile harvesters are being built that can travel from farm to farm and have proven to be effective for use in the last few years.
What is the process to dry and possibly pelletize the crop?
After harvest, the crop needs to be dried right away. Use plenty of warm air, no more than 100-120F, as air that is too hot will destroy flavors. Once dried, the hops can be stored in air-tight bags in a cooler. Before pelleting, they may need to be ground in a hammer mill and then pelleted, vacuum sealed, and again, stored cold. In NY, a 20-C license is required from NYS Department of Agriculture and Markets in order to carry out any of these practices, including drying. An additional variance is required for vacuum sealing.
What is the shelf life of product?
This depends on quality, but usually a year if the hops are processed right and vacuum packed in Mylar bags, gas flushed and kept in a cooler or freezer. Many growers don’t pelletize until they have orders ready to ship.
What varieties are in demand?
For the most part brewers are looking for the more aromatic varieties, as they can get the bittering varieties more easily from the Northwest. Common varieties include Cascade, Willamette, Mt Hood, Fuggle, Liberty, and Perle are aroma varieties, and Brewers Gold, Chinook, Centennial, Nugget and Newport are a few bittering varieties that are being grown in the Northeast. We also must consider disease resistance. Mt Hood, Centennial, and Columbus (CTZ) for example, are not resistant to downy mildew. Saaz, and most of the German varieties have had mixed results in the East so far, but growers are experimenting with these. Varieties like Citra and Mosaic are proprietary and we currently cannot obtain stock to grow them.
Finding more information
For more information, I would start by going to the Northeast Hop Alliance website at www.northeasthopalliance.org and read through some of the literature that is listed on the resource page. Copies of our newsletters are listed there, as well as articles from University of Vermont. UVM has a great resource site at http://www.uvm.edu/extension/cropsoil/hops.
Also, consider joining the Northeast Hop Alliance. The Alliance supports research and development of the industry and is a small investment for your farm. The NeHA growers will likely be putting in a group order for coir each fall. Doing bulk purchases of supplies can save on start up costs.
As mentioned previously, USAHOPS.org is the site for the Hop Growers of America and they now have some excellent resources for small growers, especially the spreadsheets for 5,10, and 20 acre hop farm startups. These are very accurate for the eastern growers and you can put in your own numbers as well.
Cornell University and Cooperative Extension offers a Cornell Guidelines for Hop Production for $28 plus shipping. There is also a new hop research yard planted at the NYS Experiment Station in Geneva. Variety and pest management trials will be carried out there.
For the last seven years we’ve held a hops conference in Troy and Morrisville, NY . A 2 DVD set (approximately 7-10 hours) is available from each conference for $30 each for the first 5 years and $60 each for the others because there are more DVDs per set, including shipping, no tax. Any two sets of DVDs can be purchased from Cooperative Ext of Madison County. (315 684-3001)
If interested in brewing, contact: NYS Brewers Association at (315) 256-7608 or by mail at PO Box 25353 Rochester, NY 14625.