World: Hop crop in Europe severely affected by hot and dry summer

With hop crop in Europe severely affected by hot and dry summer, yields are below the expected average by 10% in Germany and almost 40% in the Czech Republic, the Barth-Haas Group reported on September 24.

Alpha acid levels will also be below long-term averages. Slovenia is the only country in Europe with above average yields this year.

In Germany, varieties prone to early bloom such as Hallertau Mittelfrüh, Northern Brewer and Magnum all suffered from the phenomenon leading to poor yields. Also powdery mildew and red spider mite were a constant during the latter part of the growth period and could only be partially controlled. As a consequence of the lack of water cone development was inhibited and overall cone sizes are smaller than normal.

The hops in the Czech Republic were particularly hard hit by the drought and suffered accordingly. Yields are well below their expected average: 0.76 to/ha vs. 1.24 for the Saaz variety and 1.3 vs. 1.9 to/ha for the others. Overall the Barth experts estimate that the Czech Republic has harvested only 4,200 tonnes in comparison to an expected crop of 6,600 tonnes.

The US crop comes in well overall with only minor problems of early bloom (Centennial) and some weaker looking varieties (Cascade, Simcoe®). Conditions were good all year long with sufficient supply of irrigation water.

Harvest began around the 20th -25th of August and will last until the end of September, with yields of almost all varieties at average. The quality of the hops shows only minor infestation with spider mite and will be fine.

In 2018, the US acreage shows a new record of nearly 22,400 ha with Citra®, Cascade, Centennial, CTZ and Simcoe® making the top five varieties regarding acreage and Citra® now being the largest variety in the US by acreage. The bitter hop acreage increased for the second year in a row. On the other hand, the acreage of aroma hops has seen a slight decrease for the first time since 2011.


Production estimates

In Germany the total production is down by about 3,000 tonnes against the expected average and 1,500 tonnes down vs. the 2017 result. Taking into account the preliminary estimates on alpha acid content Germany will be short by about 900 tonnes of alpha compared to expectations and 300 tonnes compared to last year.

The US production should be at a similar level to last year and exceed 46,000 tonnes of raw hops equating to more than 5,000 tonnes of alpha.

The Czech Rep. will be down by 2,600 tonnes compared to last year’s 6,800 tonnes, i.e. approx. 38%.

Overall the Barth-Haas Group estimates that the worldwide deficit in the alpha acid balance will widen again. The increases in acreage would have sufficed to fulfil overall demand based on average yields but the poor crop in Europe causes a noticeable shortfall which the experts estimate to be in the range of 800 to 900 tonnes for the 2019 brewing year after a 124 to shortfall this year.


Market outlook

Hop acreage increased by another 600 ha in 2018 in response to a gradually increasing demand for hops, but the disappointing crop in Europe leads to another supply shortage. While worldwide beer production was flat in 2017 and is expected to remain so for 2018, the increase in hop demand is the result of a trend towards more flavorful and hoppy beers and brewers’ successful drive to sell more premium beers in the market. The Barth-Haas Group sees no end to these trends in the near future.

The forward contract ratios on both sides of the Atlantic remain at a very high level. As a consequence, there will be no spot hops in Europe to speak of and the market for most varieties will be tight, particularly with regards to bitter hops where supply has not caught up with demand yet. For European aroma hops the so called alpha clause will be triggered for many varieties for contracts based on a defined quantity of alpha acids since 2018 crop alphas are mostly more than 15% below their long-term averages. A certain degree of flexibility as well as the cooperation between contract parties will be required to solve this crop’s supply issues.

In the US market the experts expect a relaxed situation in the aroma segment but the tightness in the alpha market will also be felt in the US and affect the market there. Any available high alpha spots should quickly be absorbed by merchants looking to fill gaps originating in Europe.

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