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Hop Market Situation: Hop Harvest 2016

Hops are a natural product. We all know that. But it would still be nice, and most of all helpful, if hops (in particular the one we’re on the hunt for) were always available. Unfortunately that’s not how it works and 2015 in particular proved that you must always be prepared for a bad crop. After the meagre crop in Europe in 2015, merchants’ warehouses were completely emptied and their reserves used up. The climatic conditions (extreme dryness) also had an effect on the content of the compounds in the hops. The bitter compound and oil content of the hop varieties were far below average and that led to a shortage in the alpha market (i.e. there was a lack of alpha acid, which is needed worldwide).

Difficult start, late hope

The situation in the hop market is as exciting as ever. The strong dependency on the weather keeps all market participants, such as growers, merchants and breweries, in a constant state of tension.

2016 was cool to start with, but thanks to very good growing conditions featuring warm days with heavy rainfall in July and August, the hops grew very well and developed a high number of cones.

In Europe, the harvest finally resulted in a long-awaited, above-average crop yield. The rain in summer was sorely needed, as hops require lots of water to develop cones and create enough alpha acid. 2016 also proved how great an influence the weather has on hops. While the early-harvest hop varieties such as Hallertauer Tradition and Mittelfrüh can be picked as early as the end of August / beginning of September, the September heat created problems for the late-harvest varieties. The bitter varieties in particular have experienced yield losses due to the low precipitation and temperatures sometimes reaching over 30°C. Over this crop year there were three successive weeks with no rainfall, which made the hops susceptible to disease. Together with the reduction of bitter varieties in the USA, which is due to the demand for flavour varieties, this led to a deficit in the supply of bitter hops on the world market. Consequently, bitter hops saw an increase in price that was unexpected by the industry. Here you can see that prices in both purchasing and sales can change very suddenly in a very volatile market. Many brewers waiting for better prices miss the right moment to buy, and then only buy when there is a supply bottleneck in sought-after varieties.

 

Germany, once the largest hop producer in the world, can look back on a very good crop. Acreage was increased by 4% from 17,847 ha to 18,599 ha. All in all, the crop this year was very impressive, with an increase of 33.7% compared to the previous year. In Germany, 42,766 t of hops were harvested across all growing regions.

In the USA, acreage was massively increased but new plantings were predominantly flavour hops. Acreage with bitter hops, like Columbus, Zeus and Tomahawk was cleared and replanted with flavour varieties such as Citra, Cascade and Simcoe. Several acres of young flavour hops were also added. As such, acreage was increased from 18,478 ha to 21,458 ha. The USA has thus risen to become the world’s largest producer of hops for the very first time. However, since much of the expansion consisted of areas of young hops and because hops only produce their full yield in the second year, the production volume at 40,789 t was still slightly lower than in Germany. So this could change next year.

Despite the above-average crop yield and massive increase in acreage in the USA and Europe, the demand for hops was only just met. It was not possible to add to the stocks from past crop years and now everyone is eagerly awaiting the 2017 crop.

 

Outlook 2017

In the southern hemisphere, for example in Australia, this year’s hops have already been harvested. As hops are mainly grown in the northern hemisphere, only modest quantities of hops from the south appear on the market. There, the yield has remained average despite a similarly sizeable increase in acreage. The contracts for sought-after varieties, like the Galaxy and Enigma, could only just be fulfilled, so that there is once again no available spot volume.

Acreage has once again been increased in the USA and Europe, which is a reason to hope for good volume, at least of flavour hops.

In Europe, this year also started out very cold and the hops were slightly behind in their development. But they caught up and are developing normally. In particular, the increase in warm days and the low precipitation associated with it are causing problems for the hops.

As you can see: it’s still very exciting and everybody is hoping for a good crop.

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