Kentucky hops farmers are tapping into the craft beer market

jpatton1@herald-leader.comAugust 16, 2014 

A few Kentucky farmers are turning to a new old crop that starts with an "h" and that could become a lucrative niche.

No, not hemp.

This time it's hops, the flower — cone of bracts, actually — of the female plants of the perennial vine Humulus lupulus.

Hops are what give IPAs — India pale ales, the tangy bitter brews so much in demand these days — their astringent, grapefruity taste. Many American craft beers are "hop-forward," with extra, double or triple the amount of hops that beer drinkers might have tasted a generation ago.

With the growth of the craft beer industry in Kentucky, the demand for hops has surged, encouraging a few farmers to grow the crop.

In June, Mark Maikkula installed 21 rows of plants, not really expecting much this year from the 560 bines — as the twining plants are called — in his one-acre hop yard, Boyd's Bottom, in a former tobacco field in Boonesboro.

Plentiful rain and good weather have made for a pleasant surprise.

"We're getting lucky," Maikkula said on Thursday. "We're going to have something to sell this year." West Sixth Brewing Co. in Lexington plans to take some of the hops to make a wet hopped beer, expected to be on tap in a few weeks.

This year the Boyd's Bottom crop will be relatively small, but when the plants have matured in five years they could produce 6 to 10 pounds of hops per plant, or about 6,000 pounds.

Which sounds like a lot, but it isn't even a third of what a small craft brewery uses a year, said Scott Eidson of Revolutionary Hop Farm in Carter County. He's been growing hops since 2009, making his backyard plot the oldest Kentucky hops farm, he says.

A home brewer, Eidson said he started growing hops for his own beer. Only in the last two years has a market developed.

His hops were made into a wet hopped beer by Country Boy Brewing last week and will be available in limited supply on tap in a couple of weeks. But the potential market for hops locally is big and growing.

Last year, Alltech's Lexington Brewing and Distilling Co., West Sixth and Country Boy used well over 100,000 pounds of hops between them. Add some new craft brewers to the mix and that could make for real potential for Kentucky farms.

"It's great that the growth of craft beer is having an effect on other industries in the area," said Ben Self of West Sixth Brewing.

Not everyday hops

Wet hop beers are special, once-a-year brews.

"Wet hop beers celebrate the unique 'green' flavors that can only come from freshly harvested hops," said Robin Sither, West Sixth's head brewer. "We will put them in mesh bags and steep them in the wort in the brew kettle and/or dry hop with them in the fermenting vessel. The base beer will be pale ale with some Vienna malt designed to be characterful but not stand in the way of experiencing the fresh hop flavors."

Beyond the wet hop beers, it likely will be a while before local brewers can source much of their hops locally.

The thousands of pounds that brewers use year-round are dried and pelletized, and probably grown overseas or in Washington or Oregon, which together produce 90 percent of the hops in the U.S.

But that is changing, with Idaho, Michigan, New York, and even North Carolina getting into hops.

Like most other states, Kentucky has no infrastructure for processing hops — yet.

But Eidson and Maikkula are part of a new group, the Kentucky Hop Growers Alliance, which hopes to establish a cooperative to provide resources for other potential growers and eventually a source for beer makers.

"We're taking baby steps," Eidson said. "The next big step will be setting up local drying and storage equipment."

The University of Kentucky's Robinson Center for Appalachian Resource Sustainability in Jackson established a hop yard in 2011 to research the crop as a potential niche market for Kentucky farmers.

Conventional wisdom is that hops don't grow well here and face threats from powdery and downy mildew. But some varieties have done well.

In 2012, in an extension service publication on the project, UK said: "The biggest challenge to growers will ultimately be receiving prices for hops that are high enough to make the crop profitable. Establishment costs are high, as are labor costs."

Potential market

While the startup costs remain high (Maikkula's hop yard cost about $25,000 to install), prices have risen dramatically in the last year.

In 2004, the average price for a pound of hops was $1.88, according to Hop Growers of America; by 2013, the average price was $3.59 a pound.

According to USDA figures, total U.S. production has risen from 55 million pounds a decade ago to 69 million pounds last year.

But prices have climbed much faster: last year, the crop was worth $249 million, a 58 percent increase.

With demand soaring, broker 47 Hops this year predicted hop shortages will push prices "over $10 per pound for every aroma variety by year's end."

The broker also outlined a scenario in which prices for alpha hops, which contribute the bitter flavor, also are sent soaring, and recommended that breweries sign multiyear contracts with growers to secure any hops at all.

According to 47 Hops, "a grower can earn $10,000 to $12,000 per acre growing one of the industry's more popular varieties."

Janet Patton: (859) 231-3264. Twitter: @janetpattonhl.

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