Craft beer boom in US leading to more hop production

Research from Penn State University and the University of Toledo has revealed that craft breweries may be fuelling a geographic expansion of hop production across the US. Findings published in the Journal of Wine Economics suggest that as more craft breweries emerge around the country, so do new opportunities for farmers.

Hops lend beer its aroma and characteristic bittersweet taste. Before 2007, only three US states — Oregon, Washington and Idaho — produced hops, whereas a report released by the Hop Growers of America revealed that 29 states are now engaged in hop production.

“Our study is the first to systematically show that the number of hop farms in a state is related to the number of craft breweries. It suggests that in areas where hop production is possible and not cost-prohibitive, breweries are expanding markets for farmers and providing an opportunity to diversify farm income,” said Claudia Schmidt, Assistant Professor of Agricultural Economics in Penn State’s College of Agricultural Sciences.

Data from the US Census of Agriculture and ReferenceUSA indicates that from 2007 to 2017, breweries in the US increased from 992 to over 4000, with the number of breweries in a state associated with more hop farms and hop acres. The number of hop farms increased from 68 to 817, with hope acreage expanding from 31,145 to 59,429 acres. This growth has led to changes in the locations of hop farms in the US, and positioned the country as the largest producer of hops globally, both in terms of acreage and production.

Using farm, brewery and climate data, researchers developed a statistical model to determine whether new craft breweries in a state between 2007 and 2017 resulted in a larger number of hop producers and hop acres planted, by both new and existing growers in that state. A time lag was built into the research model to identify the effect of new breweries over time. Researchers also controlled for other variables that could influence farmers to start growing hops, such as average farm size, average net farm income and climate.

While the findings were correlational and did not point to a clear cause and effect, the time lag built into the model indicated that the growth in breweries preceded the growth in hop farms. An explanation for the trend is that increasing consumer demand for locally sourced food and beverages encourages craft brewers to seek out locally grown ingredients.

“While most craft breweries serve a local market, they haven’t always sourced local ingredients for their beers. But if you’re a brewer looking to differentiate yourself in an increasingly crowded market, sourcing ingredients locally is an approach that some brewers have found to be effective,” said Schmidt.

A similar project by Penn State Extension conducted focus groups with Pennsylvania craft brewers, who reported that sourcing ingredients locally helps them connect with customers’ sense of place and preference for a flavour profile unique to the region. With more brewers seeking locally grown hops, more farmers are willing to try growing them, if only on a small scale.

Image credit: Penn State.