How to Start a Hop Farm

It’s no secret that the popularity of craft beers is on the rise. In fact, it’s something better described as an explosion in popularity.

Hops have two purposes in beer production. Hops preserve beer and provide flavor.

All craft beer brewers need to continuously order hops. As the number of craft beer drinkers continues its growth, the need for hops in great variety grows right along with it.

What Exactly is a Hop Farm?

A hop farm is more than just a piece of land—it’s where the magic ingredient behind many of our favorite brews begins its journey. At the heart of it are hops, the aromatic female flowers (or cones) of the Humulus lupulus plant. This isn’t just any plant; it’s a perennial, meaning it grows back year after year, providing a consistent and reliable harvest for farmers.

There’s a dazzling array of hop varieties out there. With hundreds to choose from, each boasts its own distinctive flavor profile. These flavors range from citrusy to earthy, spicy to floral, and everything in between.

The variety of hop used can drastically alter the taste of the beer it goes into, making the choice of hop an essential aspect of beer crafting.

The size of a hop farm can vary widely. While some passionate cultivators might start with a modest plot of just two acres, large-scale operations can sprawl over a staggering 100 acres or more. This showcases the immense demand and reverence for this treasured ingredient.

Now, hops aren’t just left to grow wild. They have a natural inclination to climb, reaching soaring heights of 16 to 20 feet. To support this upward growth, farms use structures known as trellises. These are essentially frameworks which give the hop vines the guidance and support they need to grow tall and healthy.

In essence, a hop farm is a blend of nature’s raw beauty and human ingenuity, where age-old traditions meet innovative farming techniques to produce one of beer’s most vital ingredients.

Why You Should Start a Hop Farm Business

The craft beer movement has created a ripple effect, touching not just breweries but also the suppliers of their primary ingredients. If you’re considering starting a hop farm, here are compelling reasons for why now might be the best time:

• Craft Beer’s Rise: The US Brewers Association reports the launch of over 400 new craft breweries annually. This trend isn’t slowing down, especially with Millennials leading the charge in craft beer appreciation.
• Modest Land Requirements:
  • Unlike expansive crops like wheat or corn, hops can be cultivated in relatively smaller plots.
  • This scalability allows both new entrants and experienced farmers to experiment without the need for vast landholdings.
• Local Sourcing Laws:
  • Many states now champion the “local” ethos, with regulations in place that encourage craft brewers to use ingredients grown in their backyard.
  • Such laws not only emphasize quality and freshness but also stimulate local economies and foster stronger community ties.
• Supporting Local Economies: By investing in hop farming, you’re also bolstering your local economy. When craft brewers buy local, money stays within the community, promoting sustainable growth.

In essence, the combination of the booming craft beer industry, feasible farming requirements, and a shift towards local sourcing makes the current moment a golden one for potential hop farmers. If you’ve been contemplating this venture, there’s no better time than now to make that leap.

The Hop Industry in the United States

In 1648, colonists established a hops farm to supply a brewery in Massachusetts.

Although that’s the earliest known location of a hop farm in the US, by the 1900s Wisconsin and the Pacific Northwest were the leading producers of hops.

Today Washington leads hops production, commanding 70% of the market. Idaho chips in with 14% and Oregon with 13%. Massachusetts, New York and other states have 4% of the market.

Products You Can Create from Hop Production

Hops and hop farms offer a plethora of product opportunities beyond just the traditional brewing uses. Here’s a list of 10 products that can be produced:

1. Craft Beers: The most obvious product, different varieties of hops give beers their unique flavors, aromas, and bitterness profiles.
2. Hop Tea: A soothing drink made from steeping dried hop flowers, it’s known for its calming effects and can help with sleep.
3. Hop Pillows: Filled with dried hops, these pillows are believed to promote sleep and relaxation due to the plant’s natural sedative qualities.
4. Hop Essential Oils: Extracted from the hop flowers, the oil can be used in aromatherapy, perfumes, and even as a natural preservative.
5. Hop Tinctures: A concentrated liquid form of hops, these can be taken as dietary supplements to aid sleep or digestion.
6. Hop-Infused Lotions and Creams: With anti-inflammatory properties, hop-infused skincare products can help soothe irritated skin.
7. Hop-Based Animal Feed: After the brewing process, the spent hops can be used as a component in animal feed, particularly for cattle.
8. Hop Compost: Spent hops, being rich in nutrients, can be composted and used to enrich the soil, providing a sustainable way of recycling waste.
9. Hop-Infused Foods: From hop-infused chocolates to hop pickles, the unique flavor of hops can be introduced into a variety of gourmet foods.
10. Hop Art & Decor: Dried hop vines and flowers can be utilized in decorative wreaths, arrangements, and other craft projects, adding a rustic touch to interiors.

Exploring these diverse products can open up new avenues of revenue for hop farmers, making the most of every part of the plant and its myriad properties.

How to Start a Hop Farm: 12+ Important Steps

Acquiring Land and Ensuring Quality

• Land Selection: Assess the size needed, considering hops variety, market, and production goals.
• Land Quality: Focus on well-draining, fertile soil with good sun exposure, confirmed by a soil test.

Setting Up Your Hop Farm

• Choosing Hop Varieties: Select types in demand and suitable for your climate.
• Building a Trellis System: Crucial for supporting vertical growth.
• Irrigation System: Implement efficient systems like drip irrigation for consistent watering.

Planting and Maintaining Your Hop Yard

• Planting Techniques: Use the right methods for hop varieties and “trellis training.”
• Care and Maintenance: Regular pruning, training vines, and pest control are essential.
• Nutrient & Pest Management: Apply the right fertilizers and monitor for pests.

Harvesting and Processing

• Harvesting Techniques: Cut low and use a hop picker for flower extraction.
• Drying Hops: Ensure moisture content is optimal to prevent mold.
• Storage: Keep dried hops in cool, dark places for quality preservation.

Essential Resources and Equipment

• Trellis Systems: Construct to support rapid growth.
• Irrigation: Budget for systems like drip irrigation and overhead sprinklers.
• Equipment: Start with hand harvesting, then scale up to mechanical pickers, bailers, and tractors.

Marketing and Sales Strategies

• Building Relationships: Engage with local breweries and offer samples.
• Online Sales: Set up a platform for direct sales to home brewers and craft breweries.
• Join Associations: Network through regional hop growing associations.

Expanding and Diversifying Your Business

• Variety Expansion: Add more hop types as you gain experience.
• Scaling Production: Increase acreage and invest in advanced equipment.
• Alternative Uses: Explore hops in teas, cosmetics, and pharmaceuticals.

Sustainable Practices and Continuous Learning

• Sustainable Farming: Adopt organic methods, conserve water, and use eco-friendly pest control.
• Continuous Learning: Stay informed about hop farming trends and craft brewing developments.

Final Thoughts on Starting a Hop Farm

• Embrace Adaptation: Be ready to adapt to changing agricultural methods and market demands.
• Community Engagement: Collaborate with other hop farmers and participate in workshops and associations.

By following these steps and continuously learning, you can successfully start and grow a hop farm, contributing to the vibrant craft brewing industry.

How Much do Hop Farmers Make?

Hop Growers of America has developed a number of sample budgets for a hop farm of varying size.

Income is affected by two main factors:

1. The length of time you’ve been in business. Profits are eaten up the first year or two by the cost of capital investment, and the length of time it takes for hop plants to mature (3 years).
2. The size in acreage of your farm.

Hop Growers of America has all the questions answered for newcomers. Basically, hops sell at from $3-15 per pound. When plants are mature, the yield can be 1,800 pounds per acre.

Most craft breweries contract for 90% of the hops they use. It can be hard for newcomers to edge in on long-established contracts.

Things to Consider Before Starting a Hop Business

Understanding the Nature of Hops

Growth Cycle: Hops require a 120-day growing season, thriving best in USDA hardiness zones 3-8. After harvesting, the roots remain in the soil. Take note that if temperatures plummet below -20°F, the plant’s survival is threatened.

Site Selection for Optimal Growth

Soil Quality: Favor regions with fertile, well-draining soil.

Sunlight: Ensure the chosen location gets a daily sun exposure of 6-8 hours, essential for healthy hop growth.

Climate and Environmental Considerations

Soil pH Level: Aim for a soil pH range between 6-7.5.

Ideal Climate: A climate characterized by hot, humid summers is ideal. This is one reason the Pacific Northwest is a predominant hub for hop farming.

Navigating Environmental Regulations

Varied Permits: Acquire relevant environmental permits, which can differ state-by-state.

Special Licensing: States like New York mandate specific licenses for hop farming. Familiarize yourself with regional requirements.

Identifying Your Target Market

Understanding Contracts: Recognize that established hop growers often have long-term contracts in place, aligning with the plant’s peak production years.

Market Research: Delve into potential buyer-producer relationships. Engage with local associations for industry insights.

Know Your Customers: Pinpoint who your primary customers will be. Are they craft brewers, food manufacturers, or home brewing enthusiasts?

Labor and Workforce Management

Seasonal vs. Permanent: While certain tasks, like planting and trellis training, demand seasonal help, there’s a need for full-time staff for consistent monitoring against pests, fungal diseases, and ensuring apt irrigation.

Insuring Your Business with Proper Coverage

Specialized Insurance: As with any agricultural business, opt for crop insurance to safeguard against unforeseen crop losses. Furthermore, consider comprehensive coverage for farm infrastructure, machinery, and vehicles.

Managing Taxes Efficiently

Employee Identification Number (EIN): If you’re looking to hire, an EIN is essential.

Tax Estimation and Payments: Given the seasonal nature of hop farming income—primarily concentrated around the harvest period—it’s pivotal to estimate taxes and make quarterly payments to avoid financial hiccups.

By giving due consideration to each of these aspects, you’ll be better positioned to kickstart a prosperous hop farming enterprise.

How much does it cost to start growing hops?

The estimate for start-up costs is $200,000 for 10 acres.

How much is an acre of hops worth?

The value of an acre of hops varies depending on several factors, including the hop variety, location, market demand, and the yield per acre. As of my last training data up to 2021, the average U.S. hop farm could expect a yield of around 1,700 to 2,500 pounds per acre for mature plants, depending on variety and growing conditions.

In terms of pricing, hops sold for anywhere between $3 to $20 per pound, depending on the variety and contract specifics. Using an average price of $10 per pound for a mid-range variety and an average yield of 2,000 pounds per acre, one acre of hops could be worth about $20,000. However, this is a rough estimation.

It’s essential to consider expenses like planting, cultivation, harvest, processing, and marketing, which can significantly affect the net income from that acre. Additionally, market conditions and demand for specific hop varieties can cause prices to fluctuate year-to-year.

For the most accurate and up-to-date information, prospective hop farmers should consult local agricultural extensions or hop grower associations in their region.

How many acres of hops are profitable?

Even if you sell $18,000 worth for one acre, you may net only $1,000 per acre your first year.

That’s due to the costs of the trellis system and other farm machinery. Also, your plants have not matured to their top producing capabilities when harvesting at one or two years old.

The more acres, the more trellises you need. But the equipment needs don’t change.

How many acres do you need to grow hops?

According to a 2020 Cornell study, the cost per acre to get established is $12,000-15,000 per acre. According to the same study, 10-15 acres should yield $12,000-15,000 per acre income.

Once you’re established with equipment, the variations in profit are connected to the age of the plant. Keeping the farm in peak production mode requires planning.

Image: Depositphotos

This article, "How to Start a Hop Farm" was first published on Small Business Trends