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 is a Hop Farm?

Hops are the female flowers (cones) of a plant. All types are perennial plants.

There are hundreds of varieties of hops, and each variety has a unique flavor. A hop farm can be as small as two acres but large-scale operations are much larger, even 100 acres and more.

On the farm, hops are planted and grown on structures called trellises. Hops are climbers that grow from 16 to 20 feet tall.

Why You Should Start a Hop Farm Business

Due to the demand for craft beers, there is a demand for more hops suppliers. According to the US Brewers Association, there are more than 400 new craft breweries each year. And the popularity amongst young consumers is especially high, Millenials love craft beer.

Compared to other agricultural crops, not much land is needed.

NEED TO KNOW: Many states have laws that require craft brewers to use locally sourced ingredients.

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

Wet Hops – This is a niche. Hops cones must be dried and processed before they are shipped, but cones can also be used before they are dried, as “wet.” If shipped “wet” they must be used within 24 hours.

Bittering Hops – These are added early in the brewing process. Bittering hops have antibacterial properties.

Aroma Hops – These are the hops that add flavor. There are hundreds. Among the most popular are the citrus flavors, which hold more than 80% of the market.

“Non-beer” Uses – Hops are used for medicinal purposes. Hops cones can be used as food, chopped and sprinkled on salads and even French fries. In food recipes, hops can replace basil.

Foundation of Craft Beer – Use the hops you grow in your craft brewing business.

How to Start a Hop Farm: 12 Important Steps

Here’s more information about the steps:

1. Understanding the Basics of Running a Hop Farm or Hop Yard

The planting and “trellis training” are important to the success of the hops. These are important parts of running the hop farm but care of hops at harvest is most important.

The quality of the hops is directly connected to how they are dried, cooled, bailed and pelletized.

2. Learning the Resources Needed for Running Hop Farms

The equipment associated with harvest is expensive. There are regional hop growing associations in many states, and members of these may be able to share resources. Most commonly, harvest equipment is shared.

What’s needed:

Trellis Systems – Hops can grow 20 feet in six weeks. Newcomers can construct the trellises in the off season.

Drip irrigation system – These systems can cost about $4,000 per acres.

Overhead sprinklers – The cost is about 1,000 per acres.

Harvesters – You can harvest hops by hand. When plants are thoroughly producing you’ll need a hops picker. The largest can cost up to $35,000, and can process more than 6 vines per minute.

Hops Bailers – Hops are compressed into 200-pound, burlap-wrapped bales.

Tractors – Harvesters and bailers are run by the PTO system on tractors.

3. Learning the Plant Varieties

The citrus flavors are the most popular hop varieties. In 2012 citrus flavors held 40% of the market. Today citrus flavors hold 80% of the market.

There are hundreds of flavors, with the majority in the citrus-type.

Learning your target market is part of learning the varieties. There are specialized types that are growing in popularity.

One of these is Hallertauer. As it sounds, it’s a German hop prized for lagers and ales. Bittering hops also hold a growing part of the market. Golding is a British hop, known for its mild spice and used for bittering.

4. Ordering the Plant Stock and Timing Delivery

They are planted in the spring. It’s a perennial that has a five-year life, with its best years of production from 3-5 years.

Depending on your spacing, you’ll need 800 to 1200 plants per acres.

You can plant Rhizomes, which are pieces of root from the female plant. Or you can plant Crowns, which is the entire plant.

Rhizomes are readily available in the fall. You can purchase them then and store in a cold, dark place to be planted in the spring.

5. Planting the Rootstock

The way both Rhizomes and Crowns are planted is by hand. You should prep the soil by plowing or tilling.

6. Caring for Hop Plants

Water supply amount and pest and nutrient management are important.

You’ll need about 150-pounds of nitrogen-based fertilizer per acres. The timing of application is important.

The plants must be manually “trained” to grow up the trellis.

During the growing season, the plants need 30 inches of precipitation. Since that’s not usually attainable, you’ll use your drip irrigation system.

You’ll need IPM (Integrated Pest Management) to control the pests. The main pests are Hop aphids and tw0-spotted spider mites.

Be ready with a fungicide if needed as a way to prevent or treat powdery mildew and downy mildew.

7. Harvesting Hop Plants

The hop plant is cut low and the vine goes through the hop picker to separate the female flowers.

8. Drying Hops

The dryness of hops is tested by a moisture meter. The desired level of moisture is no less than 6%.

If the hops aren’t dry enough, they will mold. If they’re too dry, the hops will shatter and loose quality.

Kilns are expensive and many hops growers send their product to companies that specialize in drying.

9. Storing Hops

Dried hops should be kept away from heat and light. The colder, the better – cold helps hops retain aroma and quality.

10. Learning the Brewing Process for Craft Brewers

The main ingredients are water, hops, barley (malt) and yeast.

Here are the steps:

1. Mashing – Grains and ingredients are added with hot water, becoming Wort.
2. Boiling – Wort is transferred to a kettle and boiled. Bittering hops are added early, and aroma hops later in the process.
3. Fermentation – The boil is cooled and yeast is added. Yeast will convert the sugars to alcohol.
4. Filtering and pouring into barrels or bottles.

11. Marketing Your Hop Business

If you’re marketing your hops, a first step is joining your local or regional hop growing association via its website.

If you’re brewing craft beer, use social media and a website for promotion. Have tastings and other events and collect an email address from each attendee.

12. Selling

Don’t lose sight of the fact that even if you’re in the east, you are competing with established growers in the Pacific Northwest. The product is light and inexpensive to ship.

Use the harvest yourself in your craft brews business. Or sell to local beer makers, commercial and home-based, using your website and other promotions to build orders.

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

Hops need a 120-day growing season. Roots are left in the ground after harvest. If the temperatures get colder than -20, the plant likely won’t survive. They grow best in USDA hardiness zones 3-8.

Site Selection

Pick an area with rich, well-draining soil where plants will get 6-8 hours of sunlight daily.

Climate and Environment

The soil pH content should be 6-7.5. The best climate is one with a hot, moist summer.

That’s why the Pacific Northwest is a leading area.

Environmental Permits

Environmental permits vary by state. In some states, additional permits, licensing and approvals are needed.

Special licensing is required in New York.

Your Target Market

Established growers have established contracts for their product. These contracts are usually for several years, based on the prime production years of the hops plant.

Your research should target learning information about long-term relationships between producers and buyers. Also your area association can be a source of information.

Who are your customers? What type are they likely to order? Are they in the beverage industry, food industry or home brewers? These are points to consider.

Labor

Much of the labor is seasonal help. Workers are needed during planting and also during the critical “trellis training” times. Permanent staff is needed to monitor for pests and fungus, and water supply.

Insurance

Farms are specific insurance needs. For example, you can get crop insurance which helps cover you for crop loss due to weather disasters. You also need typical business insurance, such as coverage for buildings, farm machinery and vehicles.

Taxes

If you plan to hire employees, you’ll need an EIN number. You’ll need to estimate taxes, and pay quarterly. This is important since your income will basically occur during one month of the year at harvest.

Growing Hops in New York

The Cornell Small Farms Program seeks to aid hop growers. The program provides research and advice, as well as educational videos and training. The program greatly helps with planning.

In New York, you’ll need a 20-C license from the NY Department of Agriculture. The state also requires that drying, grinding, pelletizing and vacuum sealing processes be done at licensed facilities.

Although those requirements may seem restrictive, they free small scale growers from the need to buy expensive equipment. The requirement can help small scale growers get started with the product without being saddled by a huge investment of capital costs.

How much does it cost to start growing hops?

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

How much is an acre of hops worth?

It depends on location and market. But, in general:

You can have 1,200 plants per acre

Each plant can produce a crop of 1-2 pounds of dried product

You can get $3 to $15 per pound depending on market prices.

At one pound per plant, you can get between $3,600 and $18,000 for your acre.

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