Navigating the Future of Hops: Trends, Challenges, and What’s Next for 2025
Prologue
Big changes are happening in the hop industry. Last week, I was laid off from Roy Farms due to the current market conditions and strategic pivots necessary for the company. These are tough and interesting times for everyone in the industry. I’ve written an article on my substack that breaks down some of these massive changes, and I highly recommend checking that out. Additionally, if you haven’t already, follow No Dirt No Flowers podcast with Drew and Mike from Roy Farms. They are breaking down at the farm level what’s happening in hops that have led to some of these changes. I have captured some of these insights from their first episode in this article.
I’m deeply proud of my contributions at Roy Farms, especially leading the creation and execution of the Latitude 46 event and supporting our breeding program. It has been a true honor representing a farm filled with dedicated and hardworking individuals.
I’m looking forward to pivoting my focus back toward content creation, specifically centered around hop economics, industry insights, and market trends. I’m excited to be writing about hops again!
I have some great projects on the horizon, I’m working on my MBA at UC Davis, and currently in partnership with Washington State University, lecturing and creating programming for their new brewing program. However, I’m actively exploring new opportunities, please feel free to check out my LinkedIn profile or connect directly.
Key Take Aways
· The U.S. hop industry is recalibrating after years of overproduction, with acreage cut by ~18% in 2024 and total inventory still historically high despite a 6% stock decrease.
· Proprietary hops (like Citra®, Mosaic®, Simcoe®) dominate the market but present higher risks during downturns, leading some growers to pivot back to public varieties like Cascade.
· Contracting practices are shifting—brewers are now contracting 50–80% of projected needs instead of 100%, and flexible contracts are becoming more common to avoid future gluts.
· Surplus inventory and aging hops are raising quality concerns; understanding and monitoring Hop Storage Index (HSI) is crucial for both brewers and merchants navigating older lots.
· Sustainability and collaboration are essential to avoid repeating boom-bust cycles, with industry voices calling for more transparency, shared responsibility, and smarter resource management.
Hop Market Trends & Stocks
The U.S. hop industry is currently adjusting from recent oversupply challenges. Total hop inventory dropped by 6% to 173 million pounds as of March 2025. Most inventory remains with growers and dealers (150 million pounds), while brewers hold only 23 million pounds. Despite this decrease, overall stock levels are still historically high, signaling continued market adjustments.
Growers significantly reduced acreage, cutting about 18% in 2024 alone, dropping from the 2021 peak of around 60,800 acres to approximately 44,800 acres. Initially, efficiency kept production stable, with the 2023 crop slightly increasing to 104 million pounds. By 2024, acreage cuts reduced output to 87.1 million pounds.
While we are seeing some growth in craft beer and beer globally, the decrease in demand from the brewing sector from previous years (falling by 1% in 2023) has still had an impact. This stagnant or decreasing beer production, coupled with previous overplanting, has created significant hop surpluses. Hop prices have consequently fallen, with brewers focusing on using existing stocks and remedying old inventory rather than purchasing new.
Released March 14, 2025, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA).
Global Context:
Globally, similar oversupply issues have emerged, notably in Germany, the world’s second-largest producer. Despite recent drought impacts, Germany produced a large crop in 2024 (48,964 metric tons or ~108 million pounds), contributing to global surplus.
New Zealand, known for specialty hop varieties, continues expanding its acreage due to high international demand. With government-backed investments, New Zealand aims to significantly increase production by 2027. However, its output remains small, around 2.7 million pounds, and often quickly sells out.
The Czech Republic, famous for its Saaz hops, produces roughly 15–20 million pounds annually, exporting most of its crop. Czech growers face climate challenges, experiencing fluctuating yields due to increasingly extreme weather conditions.
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Proprietary vs. Public Hop Varieties
As I’ve discussed before, a significant shift in the hop industry is the rise of proprietary (privately bred and trademarked) hop varieties compared to traditional public-domain hops. Popular proprietary hops, such as Citra®, Mosaic®, and Simcoe®, are owned by private companies and cultivated under licensing agreements with select farms. Because of their exclusivity, these hops often sell at premium prices, allowing the owning companies significant control over their supply. By 2024, proprietary hops dominated U.S. cultivation, with approximately 75% of U.S. hop acreage located in Washington’s Yakima Valley, much of it dedicated to proprietary aroma varieties.
While proprietary hops can generate significant profits during times of high demand, they amplify financial risk during market downturns, especially for growers without secure contracts. This vulnerability became evident when a major surplus emerged by 2023, notably a 35–40 million pound excess of the “big three” proprietary varieties, Citra, Mosaic, and Simcoe. This oversupply forced growers to drastically reduce their acreage, severely impacting smaller, independent farms, some experiencing reduced or canceled contracts.
Consequently, some farmers have shifted their focus back toward public hop varieties, such as Cascade and Centennial. Public hops, though historically less trendy, offer greater flexibility since they don’t require royalty fees and licensing agreements. Cascade hops, in particular, saw a notable resurgence, with U.S. acreage increasing by approximately 18% in 2023 as brewers sought more affordable and readily available alternatives amidst the high costs and tight controls associated with proprietary hops.
This ongoing tension between proprietary and public hops significantly influences pricing and availability. Proprietary hops typically maintain higher prices due to controlled production, whereas public hops offer lower costs and easier access, particularly beneficial for small breweries relying on spot-market purchases.
Economic Pressures on Hop Growers
Hop farming is a highly capital-intensive and cyclical business, leaving growers especially vulnerable during periods of market oversupply. Recently, hop prices have plunged significantly from previous highs. Spot-market prices for some hop varieties dropped to multi-year lows due to excess supply, creating intense financial pressure across the industry.
One high-profile example was the bankruptcy of Willamette Valley Hops, a major hop merchant in Oregon, which filed for Chapter 11 bankruptcy in early 2024. Additionally, just this past month, we saw the closure of Brulotte Farm’s hop facility, a family farm that has been growing for the past 81 years. This rapid market shift from shortage to oversupply highlights the severe risks growers faced.
Amid this glut of inventory, another increasingly important consideration is Hop Storage Index (HSI), a key indicator of hop freshness and quality over time. Dr. Thomas Shellhammer of Oregon State University has extensively studied HSI, showing how it directly correlates with the degradation of aroma compounds and alpha acids, particularly in older or poorly stored hops. As farmers and dealers sit on excess stock from prior crop years, HSI becomes more than a lab metric, it’s a financial and sensory risk factor. Brewers using older lots must adjust formulations to account for diminished potency, while merchants face declining value as HSI rises. As highlighted in my 2023 piece “The Underrated Number,” understanding and managing HSI is now essential for both quality control and inventory strategy in a market still rebalancing from oversupply.
Beer production, unlike many other packaged goods, is uniquely reliant on specialized agricultural products like hops. During the boom of the 2010s, many growers expanded acreage and invested in expensive processing equipment to meet demand. But with shifting consumer preferences and a potential plateau in craft beer growth, coming off of reduced demand, much of that infrastructure is now underutilized, compounding economic challenges for hop farms.
Broader economic pressures have also impacted growers. Labor, fertilizer, and shipping costs have risen post-pandemic, while export logistics continue to present delays and increased fees. There are some concerns now about the Canadian tariffs impacting US grown hops. Meanwhile, the rise of lighter beer styles and alternative beverages like hard seltzers has chipped away at hop demand, making the double-digit growth once common in the 2010s increasingly difficult.
Hop Contracting and Industry Stability
Hop contracts (agreements where brewers commit to purchasing specified hop quantities in future years) have long been a stabilizing force in the industry. In theory, they ensure growers plant appropriately while securing hops for brewers. But during the last few years of surplus, the system has shown its vulnerabilities.
Many brewers found themselves over contracted due to earlier optimistic forecasts, or fear mongering, leaving them paying for hops they no longer need. Brewers have responded by scaling back, now often contracting 50–80% of projected needs and relying on the spot market to fill gaps, instead of contracting nearly 100% as they did in the past.
From the grower’s side, contracts are still critical, especially for financing, but there's been a shift toward diversification and caution. Over-reliance on a single variety or buyer is now seen as too risky. Flex contracts that allow volume and variety adjustments are gaining popularity as a way to protect both sides from volatility.
Water supply concerns have added urgency to these contract decisions. In Yakima, reservoir levels are at their third-lowest since 1971, with snowpack also well below average. These conditions have prompted warnings to brewers about potential shortages in 2025. While contracting ahead for up to 16 months may be wise, fear-based contracting beyond actual needs, like the 110% levels seen in previous drought years, has historically led to overplanting and even deeper surpluses (listen to No Dirt No Flowers on Spotify for more).
There is the potential in this market for idle acreage, due to unfulfilled or reduced contracts. This mismatch between contracted and actual demand causes economic instability, leaving growers without direction and driving more brewers to rely on the spot market. Combined with long-term planning challenges, some in the industry are rethinking how to build sustainable, flexible agreements to reflect real world conditions.
Looking Ahead: Collaboration, Sustainability, and the Path Forward
Amid these challenges, calls for more sustainable business practices are growing louder. Industry leaders advocate for renegotiating legacy contracts that no longer reflect current market conditions and supporting smaller farms through more equitable, transparent supply chain practices. The hop industry is confronting its limits: too much capacity, not enough demand, and the concept of constant expansion no longer serving the market.
To ensure long-term industry health, stronger collaboration between growers and brewers is essential. As Eric Sannerud has noted, "brewing is an agricultural act." A more open, cooperative approach, rooted in flexibility, trust, and shared responsibility, could stabilize the hop market and help it weather the next cycle.
Overall, the hop industry stands at a pivotal moment. Between surplus inventory, shifting consumer trends, and climate uncertainties, it faces the challenge, and opportunity, of reshaping itself through smart resource management, better contracting, and renewed commitment to sustainability.
Additional References:
Appellation Beer. (2024). Hop Queries. Retrieved from https://appellationbeer.com/
Elliot, M. (2024). Annual hop acreage and production updates. The New Brewer, November/December 2024. Brewers Association.
Infante, D. (2025, February).The U.S. Hops Business Is in Bad Shape. Here’s Why. Hop Take. https://vinepair.com/articles/hop-take-us-hop-business-decline-explained/
MacKinnon, D. (2024–2025). https://mackinnonreport.substack.com
Sannerud, E. Hop Notes. https://ericrsannerud.substack.com
Shan Ferments. (2023, March 22). The underrated number. https://www.shanferments.com/blog-resources/the-underrated-number
U.S. Department of Agriculture. (2024). National hop report. USDA National Agricultural Statistics Service. https://www.nass.usda.gov