TLDR:

• The Hop Acreage Strung Report indicates a 5,567-acre reduction in hop farms, signaling potential supply shortages and price volatility for brewers.

• Citra® and Mosaic® hop varieties face significant cuts, while high alpha types like CTZ and Pahto® increase, affecting supply and pricing dynamics.

• Oregon, Washington, and Idaho experienced varying degrees of acreage losses, influencing the availability and cost of state-specific hop varieties for brewers.

Prologue

This article is a summary of the recent USDA NASS Annual Hop Acreage report. A more in-depth evaluation and analysis was completed by Eric Sannerud (Eric R. Sannerud), a professional in the hop industry, with over 10 years of experience in hops, including the commercialization of his own 80 acre hop farm in Minnnesota. For more in depth details about this report, his most recent article and analysis can be found here.

The USDA report is available here on page 6 & 7.

Introduction

With the arrival of spring, the USDA's National Agricultural Statistics Service (NASS) ushers in a new cycle of growth with its annual Hop Acreage Strung for Harvest Report. This in-depth report lays out the projected harvest size, variety of hops being grown, and the precise locations of these hop plantations.

The unveiling of the 2023 report happens at a critical juncture. The brewing sector finds itself on a tightrope, balancing against a potential 40 million pound excess of hops, a formidable surplus that could disrupt market stability. The report offers vital data on changes in regional cultivation, the hop varieties most affected, and shifts in growing regions. These insights not only map out the hop market's future path but also bear significant consequences for brewers.

The Reductions

The 2023 Acreage Strung Report shows that 5,567 less acres of hops were strung this year. Although this is a significant reduction, it falls short of the 10,000 acre goal set out at the USA Hops Conference merchant panel last year. The intent of this goal was to reduce the annual supply of hops to a level below demand, in order to start reducing the 40M extra pounds of hops in the market.

Unfortunately, the 5,500-acre reduction might not be enough to make a significant dent in the burgeoning hop surplus. This suggests that US hop acreage may continue to fall in the future, posing a significant risk to brewers as it might lead to hops shortages and volatility in the prices of different varieties.

The Variety Shifts

Among the varieties of hops, Citra® and Mosaic® were the biggest losers, seeing a reduction of 3,200 acres (27%) and 1,344 acres (20%) respectively. On the other hand, high alpha varieties like CTZ and Pahto® gained, with an increase of 1,960 acres (43%) and 555 acres (32%) respectively.

Cuts to popular hops like Citra® and Mosaic® could lead to a potential supply shortage of these favored hop varieties among brewers, resulting in higher prices and impacting the flavor profiles of beers. Meanwhile, the increased acreage of CTZ and Pahto® suggests an oversupply in the alpha market, which could potentially lead to lower prices for these varieties.

The State-wise Impact

The report shows that Oregon faced the biggest percentage loss, Washington saw the largest number of acres removed, while Idaho experienced the harshest cuts in valuable proprietary allotments. This is particularly concerning for Idaho farmers who are relatively new to the hop growing industry.

For brewers, the state-wise cuts could affect the supply of specific hop varieties from these states, potentially leading to changes in sourcing and pricing.

Why This Matters to Brewers

The Hop Acreage Strung Report matters significantly to brewers. It impacts the availability and price of different hop varieties, which directly influence the production costs and flavor profiles of beers. To support farmers during these challenging times and ensure a steady supply of hops, brewers are encouraged to:

• Use a broader diversity of American hop varieties

• Support public hops and different ownership models

• Source from multiple suppliers or directly from the farms

In the end, every hop purchasing decision you make as a brewer has real impacts on the livelihoods of farmers. Understanding these changes and their implications is key to making informed decisions that will benefit both your brewery and the wider hop farming community.