More states grow hops as craft beer popularity booms

The number of hop farms in a state is related to the number of craft breweries, the new research shows. (Credit: Penn State)

The surge in craft breweries may be fueling an unprecedented geographic expansion of hops production across the US, a new study shows.

The findings suggest that as more craft breweries emerge around the country, so may new opportunities for farmers.

Hops are a key ingredient in beer production, providing aroma and bittering characteristics. Before 2007, hop production in the US was limited to only three Pacific Northwest states—Oregon, Washington, and Idaho—says Claudia Schmidt, assistant professor of agricultural economics in the College of Agricultural Sciences at Penn State.

Now, 29 states are involved with hop production, Schmidt says, citing a report from the Hop Growers of America.

“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,” she says. “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.”

Data from the US Census of Agriculture and ReferenceUSA shows that from 2007 to 2017, the number of breweries in the US more than quadrupled from 992 to more than 4,000. Further, the number of breweries in a state associates with more hop farms and hop acres five years later. The number of hop farms grew from 68 to 817, and hop acreage expanded from 31,145 to 59,429 acres.

“This growth has not only led to interesting changes in the locations of hop farms across the US, but it has positioned the US as the largest producer of hops globally, both in terms of acreage and production,” says lead author Elizabeth Dobis, a postdoctoral scholar at the Penn State-based Northeast Regional Center for Rural Development.

Working with farm, brewery, and climate data, the 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. They built a time-lag into their model to identify the effect of new breweries over time. They also controlled for other variables that may influence farmers to start growing hops, such as average farm size, average net farm income, and climate.

The findings in Journal of Wine Economics are correlational and do not point to a clear cause-and-effect. However, the time-lag built into the model indicates that the growth in breweries preceded the growth in hop farms, Dobis says.

One possible explanation for the trend is that the growing consumer demand for locally sourced food and beverages encourages craft brewers to seek out locally grown ingredients, Schmidt says.

“While most craft breweries serve a local market, they haven’t always sourced local ingredients for their beers,” Schmidt says. “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.”

For example, in a project unrelated to the current study, Penn State Extension’s Kristy Borrelli and Maria Graziani conducted focus groups with Pennsylvania craft brewers, who reported that sourcing ingredients locally helps them connect with their customers’ sense of place and preference for a flavor profile unique to the region.

If more brewers are looking for hops grown nearby, then more farmers may be willing to try growing them, even if only on a small scale. For instance, in Pennsylvania only 17 farms reported hop production in 2017, and their combined acreage is small—only 21 acres in all, according to the US Census of Agriculture.

Additional coauthors are from the University of Toledo and Penn State. The USDA National Institutes of Food and Agriculture and Multistate Research Appropriations funded the work.

Source: Penn State